PETRONILO B. LAROCO, PETITIONER, VS. GOVERNMENT SERVICE INSURANCE SYSTEM COMMITTEE ON CLAIMS, RESPONDENT.

Laroco versus Government Service Insurance System Committee on Claims

The Case

This is a petition for review on certiorari brought by Petronilo Laroco against the Government Service Insurance System Committee on Claims, questioning the denial of his application for survivorship benefits arising from the death of his daughter Cristie, a public school teacher and GSIS member. The case matters because it draws the outer boundary of an administrative agency's rule-making power: it asks whether the GSIS, through its Revised Implementing Rules and Regulations of Republic Act Number 8291, may add a qualification for survivorship benefits that the enabling statute itself does not impose. The Supreme Court answers no, and in doing so restates the doctrine that a regulation which abridges, enlarges, or modifies its enabling law is void.

Procedural History

Petronilo applied for survivorship benefits with the GSIS Committee on Claims, which denied the application in a decision dated September 4, 2018, holding that as a secondary beneficiary he could qualify only if the deceased member had rendered at least 15 years of government service. He appealed to the GSIS Board of Trustees, which affirmed the denial in its decision dated July 31, 2019, and later denied his motion for reconsideration. Petronilo then went up to the Court of Appeals by a petition for review under Rule 43. The Court of Appeals denied the petition in a decision dated January 25, 2023, and denied his motion for reconsideration in a resolution dated May 24, 2023. He then filed the present petition for review on certiorari under Rule 45 before the Supreme Court.

Facts

Cristie Laroco was a teacher at Camp Crame Elementary School. At the time of her death on October 24, 2017, she was a government employee who had rendered a total of about 13 years in government service and had paid premiums to the GSIS for about 12 years. She died single and without issue. Her father, Petronilo, was her sole heir.

Petronilo applied with the GSIS for survivorship benefits as Cristie's secondary beneficiary. The GSIS Committee on Claims denied the application, relying on Section 24.2 of the Revised Implementing Rules and Regulations of Republic Act Number 8291, which provides that where the member died in service with less than 15 years of creditable service, only the primary beneficiaries shall receive the cash payment. Since Cristie had only 13 years of service, the Committee held that only her primary beneficiaries could receive survivorship benefits, and Petronilo, a secondary beneficiary, was excluded.

Petronilo insisted that he qualified under Section 21 of Republic Act Number 8291, and that the Revised Implementing Rules and Regulations was contrary to the law because it improperly excluded secondary beneficiaries where the deceased member had rendered at least three but less than 15 years of service. The GSIS Board of Trustees and the Court of Appeals both upheld the denial, prompting this petition.

Issues

• Whether or not the petition for review filed by Petronilo before the Court of Appeals was timely filed.
• Whether or not the Court of Appeals erred in affirming the denial of Petronilo's application for survivorship benefits.

Applicable Provisions

Section 20 of Republic Act Number 8291 provides:

SECTION 20. Survivorship Benefits. — When a member or pensioner dies, the beneficiaries shall be entitled to survivorship benefits provided in Sections 21 and 22 hereunder subject to the conditions therein provided for. The survivorship pension shall consist of: (1) the basic survivorship pension which is fifty percent (50%) of the basic monthly pension; and (2) the dependent children's pension not exceeding fifty percent (50%) of the basic monthly pension.

This provision frames the entitlement to survivorship benefits and points to Section 21 for its conditions.

Section 2, paragraphs (f), (g), and (h) of Republic Act Number 8291 provide:

(f) Dependents — Dependents shall be the following: (a) the legitimate spouse dependent for support upon the member or pensioner; (b) the legitimate, legitimated, legally adopted child, including the illegitimate child, who is unmarried, not gainfully employed, not over the age of majority, or is over the age of majority but incapacitated and incapable of self-support due to a mental or physical defect acquired prior to age of majority; and (c) the parents dependent upon the member for support; (g) Primary beneficiaries — The legal dependent spouse until he/she remarries and the dependent children; (h) Secondary beneficiaries — The dependent parents and, subject to the restrictions on dependent children, the legitimate descendants.

These definitions establish that a dependent parent, such as Petronilo, is a secondary beneficiary.

Section 21 of Republic Act Number 8291 provides in its material portions:

SECTION 21. Death of a Member. — (a) Upon the death of a member, the primary beneficiaries shall be entitled to: (1) survivorship pension: Provided, That the deceased: (i) was in the service at the time of his death; or (ii) if separated from the service, has at least three (3) years of service at the time of his death and has paid thirty-six (36) monthly contributions within the five-year period immediately preceding his death; or has paid a total of at least one hundred eighty (180) monthly contributions prior to his death; or (2) the survivorship pension plus a cash payment equivalent to one hundred percent (100%) of his average monthly compensation for every year of service: Provided, That the deceased was in the service at the time of his death with at least three (3) years of service; or (3) a cash payment equivalent to one hundred percent (100%) of his average monthly compensation for each year of service he paid contributions, but not less than Twelve thousand pesos (P12,000.00): Provided, That the deceased has rendered at least three (3) years of service prior to his death but does not qualify for the benefits under the item (1) or (2) of this paragraph. (c) In the absence of primary beneficiaries, the secondary beneficiaries shall be entitled to: (1) the cash payment equivalent to one hundred percent (100%) of his average monthly compensation for each year of service he paid contributions, but not less than Twelve thousand pesos (P12,000): Provided, That the member is in the service at the time of his death and has at least three (3) years of service; or (2) in the absence of secondary beneficiaries, the benefits under this paragraph shall be paid to his legal heirs.

This is the provision the Revised Implementing Rules and Regulations is said to have impaired, because it grants secondary beneficiaries benefits where the member died in service with at least three years of service.

Section 24.2 of the Revised Implementing Rules and Regulations of Republic Act Number 8291 provides:

24.2. Survivorship Benefits of Members in Active Service. 24.2.1. If at the time of death, a member was in the service and has rendered at least fifteen (15) years of creditable service: c. his primary beneficiaries shall receive the survivorship pension and cash payment equivalent to 18 x the [Basic Monthly Pension (BMP)]; or d. in the absence of primary beneficiaries, his secondary beneficiaries shall receive the cash payment equivalent to 18 x the BMP; or e. in the absence of secondary beneficiaries, the legal heirs shall receive the cash payment equivalent to 18 x the BMP. 24.2.2. If at the time of death, the member was in the service with less than fifteen (15) years of creditable service; his primary beneficiaries shall receive the cash payment equivalent to 100% of the [Average Monthly Compensation (AMC)] for every year of creditable service.

This is the challenged regulation, which the Court strikes down insofar as it excludes secondary beneficiaries.

Ruling

On the first issue, the Court held that there was no merit in the claim that the petition for review before the Court of Appeals was filed out of time. The GSIS did not raise the objection before the Court of Appeals, so it must be deemed waived, especially since that court had already ruled on the merits. At any rate, Petronilo filed within the extended period he prayed for: he asked for until February 2, 2020, a Sunday, and filed on February 3, 2020, the next working day. The Court applied Rule 22, Section 1 of the Rules of Court, which provides:

Section 1. Periods to be counted. — In computing any period of time prescribed or allowed by these Rules, by order of court, or by any applicable statute, the day of the act or event from which the designated period of time begins to run is to be excluded and the date of performance included. If the last day of the period, as thus computed, falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits, the time shall not run until the next working day.

The Court also noted that the grant or denial of an extension of time is addressed to the sound discretion of the court, and the Court of Appeals evidently accepted the difficulty of securing certified true copies as a compelling reason.

On the second issue, the Court ruled in favor of Petronilo. It held that the GSIS exceeded its authority in promulgating the Revised Implementing Rules and Regulations by removing the right of secondary beneficiaries to receive survivorship benefits under conditions expressly recognized by the law. While Section 53 of Republic Act Number 8291 grants the GSIS power to promulgate rules, that power must be exercised within the confines of the enabling statute and does not permit the agency to abridge, enlarge, supplant, or modify the law. The Court quoted its earlier ruling:

To be valid, an administrative issuance must not be ultra vires or beyond the limits of the authority conferred. It must not supplant or modify the Constitution, its enabling statute and other existing laws, for such is the sole function of the legislature which the other branches of the government cannot usurp.

The Court compared the two provisions. Under Section 21(c) in relation to Section 2(f) and (h), a secondary beneficiary is entitled to survivorship benefits provided that there is no primary beneficiary, the secondary beneficiary meets the dependency requisites, the member was in government service at the time of death, and the member had rendered at least three years of service. Section 24.2.2 of the Revised Implementing Rules and Regulations, by contrast, restricts that entitlement to cases where the member had rendered at least 15 years of creditable service. The regulation thus imposed an additional requirement not found in the law and was void for being ultra vires. The Court rejected the GSIS's equalization argument, holding that however noble its intentions, the agency cannot defeat the law through a mere administrative issuance; its remedy is to ask Congress to amend the statute. The Court also stressed that social security statutes must be liberally construed in favor of the employee and their beneficiaries, and that accrued benefits are vested property rights protected by the Due Process Clause.

Doctrine

An administrative agency's rule-making power is a delegated legislative power that must be exercised within the confines of the enabling statute and the Constitution. A regulation that abridges, enlarges, supplants, or modifies the enabling law, or that imposes additional requirements not contemplated by the statute, is void for being ultra vires and unreasonable. Applied here, Section 24.2.2 of the Revised Implementing Rules and Regulations of Republic Act Number 8291 is void insofar as it excludes secondary beneficiaries from survivorship benefits where the deceased member rendered at least three but less than 15 years of service, because Section 21(c) of the law grants those benefits under those conditions. Social security statutes are liberally construed in favor of the employee and their beneficiaries, and accrued benefits are vested property rights protected by the Due Process Clause.

Disposition

The Supreme Court granted the petition, set aside the rulings of the Court of Appeals, the GSIS Board of Trustees, and the GSIS Committee on Claims, and held Petronilo entitled to survivorship benefits as Cristie's secondary beneficiary.

Remember This

Memorize this line: a regulation that adds a requirement the enabling statute does not impose is ultra vires and void. Examiners use this case to test the limits of delegated rule-making power and the liberal construction of social security laws in favor of beneficiaries.