• SSS Answers Salary Loan and Missed Contributions Concerns
    IMAGE @ThamKC/iStock
  • You’ve probably been an SSS contributor for years now, partly because it’s the law, and partly because your employer deducts your share automatically. Or maybe you’ve left your regular job to go freelance, and you feel like there’s really no point in continuing your contributions. 

    To help enlighten us on issues, sister site Femalenetwork.com reached out to SSS assistant vice president for media affairs, Ma. Luisa Sebastian, and asked some of the common questions about benefits and loans, ranging from the most basic issues concerning salary loans to the forward-looking inquiries about retirement and pension.

    Q: What are the compelling reasons to apply for an SSS salary loan?
    AVP Luisa Sebastian (LS): There is usually a surge of applicants for the SSS salary loan during enrollment and Christmas holidays. The SSS does specify the use for salary loans. The loan can be used for educational or health needs, purchase of gadgets or any other material.

    Q: Is there a set amount for your first salary loan? How many times can you apply for it?
    LS: The amount of loan proceeds depends on your contributions. The loanable amount is the average of the last 12-monthly salary credits (MSC) of a member. So, if a member is consistently paying at the minimum monthly contribution amount of P110 (which has an equivalent MSC of 1,000), then the loan amount will be P1,000; while a member who is consistently paying at the maximum monthly contribution of P1,760 (which has an equivalent MSC of P16,000), can have a loan amount of P16,000. 

    Under the salary loan program, a member is entitled to avail of the salary loan if she has paid at least 36 monthly contributions and has at least 6 posted monthly contributions within the last 12 months before the month of filing of application.

    A member who has paid at least 36 months but not more than 72 monthly contributions is entitled to a one-month salary loan; those who have paid at least 72 monthly contributions are entitled to a two-month salary loan.

    Using our example above, if a member paying at the minimum is entitled to a two-month salary loan, her loan will then be P2,000; if member is paying at the maximum, her two-month loan will amount to P32,000.

    The maximum loanable amount is P32,000.

    A member can apply for a loan for as many times as she wants, as long as she is qualified. A member is allowed to renew the loan if she has paid her loan for at least one year and the loan balance is not more than 50 percent of the principal of her last loan.

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    Q: If you're employed, is it better to get your salary loan through your employer or would it be faster to process it at an SSS branch?
    LS: If you are employed, it is best to get your salary loan through your employer. Employed-members are required to get their certification for loan from their employers. Also, if the employer is aware that you are filing for a loan, they can assist you in following it up from the SSS through your company representatives. Making your employer aware that you have been granted a loan by the SSS will also ensure that the employer will know when deductions should be made for your loan payments, as well as the amount that should be deducted from the member's salary.

    Members can now file their salary loans online. For employed members, their employers should be registered with the SSS so that they can file their employees' loan applications online.

    Members can also opt to get their loans through prepaid cash cards issued by SSS partner banks.

    Q: Can a person have both a GSIS and an SSS membership at the same time?
    LS: Yes. Individuals who used to work in the private sector are considered members of the SSS even if they are not with the private sector anymore and have stopped paying their SSS contributions. The SSS has a "once a member, always a member" policy. This means that these individuals can still avail of benefits from the SSS as long as they meet the qualifying conditions. Some of these members may have transferred to government service and become members of the GSIS. Then, they become members of both systems.

    SSS advises these members to continue paying their contributions with the SSS to ensure their qualification to benefits and privileges under the system.

    Q: What happens if an employee resigns with an outstanding salary loan?
    LS: If a member resigns with an outstanding salary loan, the employer should deduct the full balance from the proceeds of her benefits from the company, and this should be remitted to the SSS. If the benefits of the employee cannot cover the full amount of the loan, the employer should report to the SSS the effective date of separation of the employee and the full amount of unpaid loan balance.

    On the other hand, the separated employee should pay her loan balance on her own, or, upon employment, advise the new employer of the loan so that payments can be facilitated by the new employer.

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    Q: If an employer does not remit a member's contributions, what can be done about it?
    LS: Members are enjoined to file a formal complaint against their employer if they prove that their employer is not remitting their contributions to the SSS. The member will have to go to the nearest SSS office to do this. SSS has a rule on anonymity; we will not tell the employer of the complaint but instead visit the employer and do a routine check of their documents. If the SSS sees that the employer is remiss from his duties, SSS will bill the employer, and if the employer does not comply, SSS will issue a demand letter. If at this point, the employer will still not comply, the SSS will file a case against the employer.

    Employers who fail to remit the contributions of their employees may be fined and imprisoned.

    Q: What would be the requirements to avail a salary loan if you're a freelancer?
    LS: When filing for a salary loan, you only need to submit to the nearest SSS office a filled out salary loan application form and a photocopy of your SSSID/UMID or, in its absence, two valid IDs. The salary loan application form is available in SSS offices or can be downloaded and printed from www.SSS.gov.ph.

    Q: If a member reaches retirement age, will he or she need to inform SSS about it, or will pension be automatically given?
    LS: If a member reaches retirement age, has at least 120 monthly contributions with the SSS, and has decided to retire from employment, she can file for her retirement claim at the nearest SSS office.

    Members who choose to continue working after age 60 will have to wait for their retirement from work or age 65 before they can file for their retirement claim. Members who reach age 65 can file their retirement claim whether they are employed or not.

    Q: If a member is unable to complete 120 monthly contributions which entitles her to a pension, will she be able to get back her contributions?
    LS: A person who reaches age 60 but has not completed the required 120 monthly contributions for a retirement pension has the option to continue paying her contributions until she completes the requirement, and file for a retirement pension.

    However, if she opts to file for retirement benefits even if she has not completed the required 120 monthly contributions, she will be entitled to a lump sum retirement benefit equivalent to the total amount of her contributions plus interest.

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    This story originally appeared on FemaleNetwork.com.

    * Minor edits have been made by the Smartparenting.com.ph editors.

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