Tax Notes

SSS offers short-term member loan penalty condonation program (STMLPCP)

Contents

The Social Security System (SSS) signed Circular No. 2021-14 last October 29, 2021 which allows SSS member-borrowers to fully settle their outstanding loan balance, composed of principal and interest, with condonation of penalty. The salient features of the Short-Term Member Loan Penalty Condonation Program (STMLPCP) are as follows:

Coverage

As a rule, all SSS member-borrowers with past due short-term loans for at least (6) months as of the first day of condonation period are eligible to apply for STMLPCP. Short-term member loans shall include the following:

  1. Salary loan
  2. Calamity loan
  3. Salary loan early renewal program
  4. Emergency loan
  5. Restructured loans under the loan restructuring program implemented from 2016 to 2019

Member-borrowers shall be eligible under the STMLPCP provided that they:

  1. Are under sixty-five (65) years old at the end of the installment term;
  2. Have not been granted any final benefit (i.e., permanent total disability or retirement); and,
  3. Have not been disqualified due to fraud committed against SSS.

Availment Period

The availment period is from November 15, 2021 up to February 14, 2022.

Member-borrowers, who will file their final benefits application for permanent total disability or retirement and whose contingency date is on or before the last day of the availment period of the condonation program, shall file such benefit claims within the availment period.

In case of death of the member-borrower, the heirs or beneficiaries of the deceased member-borrower are eligible to file the death benefit application, provided that the contingency date is on or before the last day of the availment period of the condonation program. The death claim must be filed within the availment period.

Payment Method

The SSS member-borrower may avail of the penalty condonation program through either one of the following schemes:

1. One-Time payment

Full payment of the total consolidated outstanding loan balance in a single payment transaction within thirty (30) calendar days from receipt of the notice of approval of the penalty condonation application. No staggered/partial payments are allowed even if the required payments are completed within the 30-day prescribed period.

2. Installment payment

A 50% down payment in a single payment transaction of the total consolidated outstanding loan balance within (30) calendar days from receipt of notice of the approval of the penalty condonation application. No staggered/partial payments are allowed even if the required payments are completed within the 30-day prescribed period.

The remaining 50% of the outstanding loan balance shall become a restructured loan to be paid in six (6) equal monthly installments starting from the month following the end of the 30-calendar day period of the consolidated loan and shall be subject to 3% interest per annum and 1% penalty per month on amortization not paid on due date.

Availment Mode

Employees who wish to avail of this program must log into their active My SSS account. SSS encourages all members to have an active account and updated contact information prior to availment of STMLPCP.

For further inquiries on STMLPCP, SSS can assist through onlineserviceasssistance@sss.gov.ph or member_relations@sss.gov.ph.

 

Source:  

P&A Grant Thornton 

Certified Public Accountants

 

As published in SunStar Cebu, dated 19 November 2021

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