MANILA, Philippines - The Social Security System (SSS) will implement a loan condonation program next year that will allow members with delinquent loan amortization accounts to settle their obligation with the state-pension fund.
“We will launch the ‘Penalty Condonation Program for Unremitted or Delinquent Loan Amortizations of Employees by Employers’ for member with unsettled short-term loans on January 3 and will run it until the end of June,” SSS Member Loans Program Management Department Head Marie Ada T. de Silva told BusinessWorld in a phone interview last Friday.
“Applicants of the program will be able to pay their overdue amortization either in full or through installment,” adding “[the program] would restore the loan privileges of members to apply for loans, renew salary loans, and lift the ‘delinquent’ tag in their account.”
The program covers all members with unsettled salary loans, calamity loans, emergency loans, education loans, privatization fund loan and stock-investment loan program.
Unlike the previous condonation program for loans in 2009, which were directly availed by SSS members, this program will be coursed through the employers. This is similar to the condonation program for contributions implemented this year.
The program can be availed by employers who were not able to remit their employees’ loan amortization and employers of employees with delinquent loans or arrears.
Meanwhile, employers who were delinquent in the payment of their SSS contributions must first settle their delinquent contributions in full or through the submission of an installment payment proposal under the SSS Condonation Law of 2009.
Ms. de Silva stressed that “SSS members who are delinquent can avail of the program, but only penalties which have accrued as of April 1, 2010 will be waived.
“Anything that has accrued after April 1 will have to be settled together with the overdue principal and interest.”
Employers may avail for the program at any SSS branch. Their mode of payment shall be approved by head of the SSS branch where they would avail of the program.
In case the employer choose to settle their obligation in an installment basis, the employer must submit an “instrument” as his guarantee to the state-pension fund to pay in “equal monthly installment in a period not exceeding 24 months” from the date of the proposal’s approval.
Ms. de Silva said “in choosing the installment mode of payment, the amount to be settled will bear an annual interest of 3%.”
“If an employer commits a violation in the terms and conditions of settling his employees’ accounts, penalties will be restored,” she added.
The condonation program was approved by the Office of the President last June.
Meanwhile, SSS, in a statement yesterday said its collection from member contributions in the National Capital Region (NCR) and Rizal province surpassed its annual target of P45.85 billion.
The state-pension fund collected P48.57 billion worth of member contributions from the NCR and Rizal province group.
The NCR group posted an estimated P79 billion worth of national and overseas contributions, up from last year’s P45.36 billion. Of which, P12.36 billion was collected from SSS’ three branches in Makati City, the country’s business district. Collections from Quezon City was at P11.69 billion.
“The NCR Group collected P585.27 million unpaid contributions from employers after sending demand letters and filing cases against them, adding that it was 33% higher than the P439.34 million collected through [filing of cases] in 2009,” SSS President and Chief Executive Officer Emilio S. de Quiros, Jr. was quoted as saying in the statement.
“The SSS will put legal pressure against employers who neglect their duties under the Social Security Law,” he added.
Under the Social Security Law, the non-remittance of contributions is punishable by imprisonment of six to 12 years. -- Ann Rozainne R. Gregorio