We asked several SS members who have outstanding loan balances with the agency why they chose to ignore the loan condonation program of the SSS last year. Most of them said that they do not see the need to settle their obligation since the money they borrowed was actually taken from their own SS contributions.
Is this the right concept when it comes to settling obligations with government agencies such as the Social Security System?
Last week, we featured the benefits of availing the loan condonation program offered by the SSS to members who failed to update their accounts. Today, we will be sharing the 7-step process that you need to follow when availing the program. We hope that we are able to encourage everyone to grab this opportunity offered by the SSS to update delinquent accounts and save your future claims from the SSS.
How to apply for the SSS Loan Condonation Program?
- Secure updated Statement of Loan Balance for Loan Restructuring Program (2 copies) from the nearest SSS office.
- Accomplish an Affidavit of Residency attesting residence/work address in a covered calamity area when the calamity/disaster happened. Member-borrower with Calamity Loan or Salary Loan Early Renewal Program (SLERP) and Death Benefit filer need not accomplish an Affidavit of Residency.
- Fill out the Loan Restructuring Application Form (MEL-01368) in one copy.
- If member-borrower is personally applying for the restructuring, present original copy of valid identification cards/documents.
- If a representative is filing for the restructuring program (on behalf of the member), he or she must submit the following:
- Letter of authority – original copy.
- Photocopies of two (2) valid identification cards each of the member-borrower and the filer, at least one (1) with photo and both with signature. Present both original copies of the identification.
- Submit the form to the nearest SSS branch or Foreign Office with the Statement of Loan Balance for Loan Restructuring Program signed in the “conforme” portion and the notarized Affidavit of Residency (if applicable).
- For the Death, Total Disability, or Retirement (DDR) filer who will avail of the Loan Restructuring program, submit this Loan Restructuring Application form, Statement of Loan Balances for Loan Restructuring program together with the DDR claim application.
You may download the forms from these links:
- SSS Loan Restructuring Program Application Form
- Affidavit of Residency
- Letter of Authority (if the application will be filed by a representative
Terms and Conditions:
- The loan/s must be past due for a period of at least six (6) months as of the first day of restructuring period.
- The member-borrower must be:
- Living or working in calamity/disaster declared areas as of disaster date or as of application date. “Living” shall refer to the home address of the member-borrower;
- Must be under 65 years old at the end of the installment term;
- Has not been granted any final benefit, i.e. total permanent disability or retirement;
- Has not been disqualified due to fraud committed against the SSS;
- Member-borrowers with final benefits application (Death, Total Disability, Retirement) whose contingency date is on or before the last day of the availment period of the restructuring program. Said final benefit claim must be filed within the availment period.
- Areas Covered
For covered short-term loan programs, below is the list of covered calamities or disasters declared by NDRRMC as under the state of calamity:
- Ondoy (2009)
- Sendong (2011)
- Pedring and Quiel (2012)
- Pablo (2012)
- Labuyo (2013)
- Maring (2013)
- Santi (2013)
- Armed Conflict in Zamboanga City (2013)
- Earthquake in Bohol and Cebu (2013)
- Yolanda (2013)
- Agaton (2013)
- Glenda (2014)
- Mario (2014)
- Ruby (2014)
- Seniang (2015)
- Lando (2015)
- Nona (2015)
- Lawin (2016)
- Nina (2016)
- Earthquake in Surigao del Norte (2017)
- Earthquake in Leyte (2017)
- Armed Conflict in Marawi City (2017)
- Urduja/Vinta (2017)
- Mayon Volcano Eruption (2018)
2. Restructured Loan Amount
The sum of principal and accrued interests of all past due short-term loans of the member-borrower shall be consolidated into one Restructured Loan (RL1).
- Full Payment – payable within 30days from the approval date of restructuring application.
- Installment Payment – payable in equal monthly amortization based on payment range as follows:
|RL1 Range (Sum of Principal and Interest)||Number of Months to Pay|
|P2,000 to P18,000||12 months|
|P18,000.01 to P36,000.00||24 months|
|P36,000.01 to P54,000.00||36 months|
|P54,000.01 to P72,000.00||48 months|
|More than P72,000.00||60 months|
The member-borrower may elect his preferred payment term but not to exceed five years.
Interest Rate and Penalty
- For installment term, RL1 shall be subject to an interest rate of 3% per annum computed on a diminishing principal balance over the applicable payment term.
- A penalty of 0.5% shall be charged against the amortization due for every month unpaid during the RL1 term.
Due Dates and Manner of Payment
- Monthly installment shall be due for payment every 10th day of the month following the amortization month. Amortization shall start on the month immediately following the approval date of the Restructured Loan.
- Restructured Loan Approval Month: April
- 1st amortization month: May
- 1st installment amortization is due on June 10.
- Payment shall be made through any SSS branch with teller facilities or authorized collection agents of the SSS.
Penalties shall be condoned after full payment of outstanding principal and interest of RL1 within the approved term. The balance of RL1 should be zero at the end of the term. Otherwise, the unpaid principal of RL1 and the proportionate balance of condonable penalty shall become part of a new principal under Restructured Loan 2 (RL2).
Interest Rate After Term Expiry
After the term of RL1 expires and the loan remains outstanding, the new principal balance under RL2 shall henceforth be charged with an interest rate of 10% per annum until fully paid.
- While the Restructured Loan is existing or outstanding, the member-borrower cannot avail other SSS short-term loan programs including Educational Assistance Loan Program.
- The member-borrower may avail of SSS short-term loan program after six (6) months from the date of full payment of the Restructured Loan.
- Once the member-borrower availed of this loan restructuring program, he/she is disqualified from availing of any future loan condonation/restructuring programs of SSS.
- In case of member-borrower’s death, total disability, or retirement, the total loan obligation or any unpaid amount of the loan as well as the interest and penalty shall be deducted from the final benefits.