Exclusion of Pension in the Determination of Indigency Qualification of Applicants for PAO Legal Services

February 26, 2016

PAO MEMORANDUM CIRCULAR NO. 002-16

 

In view of the reports that Public Attorneys and/or staff are disqualifying retirees who are receiving pensions more than the indigency threshold amount stated under Section 3, Article 2 n of the PAO Operations Manual (Office Order No. 137, Series of 2010)* from availing of the free legal services of the office, all Public Attorneys and staff are enjoined to provide legal assistance to retirees/pensioners and to dispense with the proofs of indigency, in view of the fact that pension is not considered as income. ETHIDa

Attached herewith is a copy Memorandum, dated June 27, 2014, regarding the exclusion of pension in the determination of the indigency qualification of applicants for PAO legal services, for easy reference.

It is understood that the Public Attorney concerned shall immediately cause the withdrawal of the services of the office as soon as the said retiree/pensioner has engaged the services of a de parte counsel.

The Regional Public Attorneys/OIC-RPAs, District Public Attorneys/OIC-DPAs shall be responsible in the dissemination of this circular to their lawyers and staff.

FOR STRICT COMPLIANCE.

(SGD.) DR. PERSIDA V. RUEDA-ACOSTAChief Public Attorney

ATTACHMENT

MEMORANDUM

 

This stems from your Letter dated 10 June 2014, which was indorsed to this Office by Atty. Henry M. Francisco, Officer-In-Charge, PAO-CAR Regional Office, on 10 June 2014, 1 regarding your inquiry on whether a pension should be considered part of net income in determining a prospective client's qualification to avail this Office's free legal assistance under the Indigency Test.

Please be informed that for purposes of this Office's Indigency Test, a client's pension is not included in the computation of his/her net income. The term pension is regularly defined as "[a] regular payment made during a person's retirement from an investment fund to which that person or their employer has contributed during their working life."2 It is also described as "[a] regular payment made by the government to people of or above the official retirement age and to some widows and disabled people."3

It is clear from the foregoing that pensions are usually received by persons who are retired from employment due to age or disability. Stated differently, it is in the nature of a retirement or disability benefit.

The Honorable Supreme Court discussed the rationale and nature of the said benefits in RE: Application for Survivorship Pension Benefits Under Republic Act No. 9946 of Mrs. Pacita A. Gruba, Surviving Spouse of the Late Manuel K. Gruba, Former CTA Associate Judge (A.M. No. 14155-Ret, November 19, 2013), to wit:

"Retirement laws are social legislation. In general, retirement laws provide security to the elderly who have given their prime years in employment whether in the private sector or in government. These laws ensure the welfare of individuals who are approaching their twilight years and have limited opportunities for productive employment that give them a steady income stream. In the private sector, retirement packages are usually crafted as "forced savings" on the part of the employee.

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Retirement laws, in particular, are liberally construed in favor of the retiree because their objective is to provide for the retiree's sustenance and, hopefully, even comfort when he no longer has the capability to earn a livelihood. The liberal approach aims to achieve the humanitarian purposes of the law in order that efficiency, security, and well-being of government employees may be enhanced. Indeed, retirement laws are liberally construed and administered in favor of the persons intended to be benefited, and all doubts are resolved in favor of the retiree to achieve their humanitarian purpose.

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Aside from considering old age retirement benefits, the law also protects the welfare of the heirs and surviving spouses of employees who die before or after retirement. "The law extends survivorship benefits to the surviving and qualified beneficiaries of the deceased member or pensioner to cushion the beneficiaries against the adverse economic effects resulting from the death of the wage earner or pensioner." (Emphasis supplied)

Based on the foregoing, it is clear that pensions are merely used for the sustenance of the pensioner when he/she "no longer has the capability to earn a livelihood." It can hardly be considered as "income" when its purpose is merely to defray the costs of the pensioner's subsistence considering that he/she has no other source of livelihood. cSEDTC

For your information and guidance.

For and By the Authority of the Chief Public Attorney:

(SGD.) ELPIDIO C. BACUYAG

Footnotes

* Sec. 3. Indigency Test. — Taking into consideration recent surveys on the amount needed by an average Filipino family to (a) buy its "food consumption basket" and (b) pay for its household and personal expenses, the following shall be considered indigent persons: 1. If residing in Metro Manila, whose net income does not exceed P14,000.00 a month; 2. If residing in other cities, whose net income does not exceed P13,000.00 a month; and 3. If residing in all other places, whose net income does not exceed P12,000.00 a month.

ATTACHMENT

1. Received by this Office on 24 June 2014.

2. Oxford Dictionary. http://www.oxforddictionaries.com/us/definition/american_english/pension, retrieved on 25 June 2014.

3. Ibid. 

n Note from the Publisher: Written as "Article 3" in the official document.