This statutory obligation is in keeping with the public policy of affording employees in the country a safety net in the form of pension once they retire or cash assistance in case of death. Prior to their retirement or death, SSS members may also avail of cash loans when the need arises.
There are a variety of loans that SSS members may avail of. Among these include short-term loans and calamity loans. Applications to these loans may be made after reaching the threshold number of contributions, subject to verification and submission of documentary requirements.
Here are the short-term loans offered by the SSS:
- Salary Loan
- Emergency Loan
- Investments Incentive Loan
- Educational Loan (old)
- Voc Tech Loans
- Y2K Loans
- Study Now Pay Later Plan
- SSS offers very competitive interest rates that are almost always better than the rates offered by commercial banks and other lending institutions;
- the loan application process is fairly straightforward;
- in most cases, no collateral or security is required; and
- the payment scheme is worker-friendly, as monthly amortizations for the loans are made by way of automatic salary deductions.
In the process, they end up abandoning their loans, which in the meantime continue to rack up interest and penalty charges. By the time SSS members take the time to rectify the situation, their debt had already ballooned beyond what they are capable of paying.
Why do SSS members end up abandoning their loans? Here are a few probable reasons:
- They lost their jobs or stopped working and are therefore incapable of paying their monthly dues on their own;
- they switched jobs but did not declare their outstanding loan to their new employer;
- they suffered from an accident, calamity, or disaster, which made them incapable of continuing their loan payments; or
- they migrated to a new residence either in the Philippines or overseas and did not bother to continue with their loan payments.
There are several more reasons why SSS members end up abandoning their outstanding loan obligations with SSS.
Regardless of the reason, however, two things are certain: first, the balance of the principal continues to earn interest; and second, penalty charges continue to accummulate over time.
If left unchecked, unsettled loans may prove to be detrimental to an SSS member's credit standing, future pension and death benefits entitlement, and ability to take out loans with SSS down the line.
For instance, SSS members with outstanding loans are not eligible to apply for a new loan until they have settled their current loan obligations.
In addition, the sum of the principal balance and the corresponding interests and penalty charges may be deducted from a member's pension or death benefits proceeds if still left unsettled by the time he/she retires or dies. This would result in significantly less cash entitlements.
The most prudent thing to do, of course, is never to skip payments on your current loan obligations in order to prevent racking up more interest and penalty charges. If it can't be helped, the next best thing is to look out for condonation or loan restructuring programs that are launched by the SSS every now and then.
What is loan condonation or loan restructuring program (LRP) of the SSS?
As its name implies, LRP means that the SSS will disregard the interest and penalty charges accummulated by an SSS member on account of his late payments or abandonment of his loan obligation. In turn, the SSS member commits to pay the principal balance along with the interest under a new or restructured payment scheme or plan.
The LRP is of particular benefit to those whose loan obligations have been outstanding for years. For these members, availing of the LRP would result in huge savings because all the interest and penalty charges will be forgiven. This will allow them to start on a clean slate and bring their status to current.
How to apply to the SSS loan restructuring program
1. Check out the SSS news bulletins to see if the agency has any loan condonation or loan restructuring program currently in place. These programs are not available on a permanent basis; they are launched every now and then, depending on whether the SSS sees it fit to launch them by reason of calamities or extreme hardships. (NOTE: See below for the current LRP of the SSS.)
2. Go online or to any physical office of the SSS and request for Statement of Loan Balance for Loan Restructuring Program. This will show your outstanding loan obligation, as well as the total interest and penalty charges accummulated over time.
3. As proof that one's residence or work address is in a covered calamity area when the calamity/disaster happened, fill out an Affidavit of Residency that would attest to that fact. Member-borrower with Calamity Loan or Salary Loan Early Renewal Program (SLERP) and Death Benefit filer need not accomplish an Affidavit of Residency.
4. Fill out the Loan Restructuring Application Form (MEL-01368) in one copy.
NOTE: If member-borrower is personally applying for the restructuring, present original copy of valid identification cards/documents. If a representative is filling for the restructuring program, 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.
5. Submit the form to the LRP desk of any 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).
6. Secure copy of Notice of Approval of the Loan Restructuring Application. This would show the restructured loan, including the principal, the monthly interest, and the schedule of monthly payments.
7. 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.
What is the latest loan condonation or loan restructuring program (LRP) of the SSS in 2018?
Beginning April 2, 2018 until October 1, 2018, the SSS will be accepting applications for its Loan Structuring Program (LRP). The program is seen to benefit SSS member-borrowers with outstanding short-term loans from 2009 until 2017.
One of the goals of the LRP is to bring to "good standing" member-borrowers who have been struggling to keep up with their loan payments through a restructured loan scheme that offers a very low 3% interest per annum. It is an extension of a prior loan restructuring program last year which saw 900,000 members availing of condonation, bringing the total restructured loan amounts to P13.8 billion.
Under the existing LRP, the following SSS member-borrowers are eligible to apply:
- All member-borrowers who have past due Calamity Loans or Salary Loan Early Renewal Program (SLERP);
- Member-borrowers with past due short-term loans living or working in calamity/disaster-stricken areas as declared by the National Disaster Risk Reduction and Management Council (NDRRMC) or in the case of Ondoy, by the National Government.
SSS member-borrowers residing in places declared by the NDRRMC as under state of calamity are eligible to apply for LRP:
- 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 Phreatic Eruption (2018)
Additional eligibility requirements include:
- 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 (See Areas Covered);
- 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.
In sum, the loan condonation or loan restructuring program of the SSS presents a great opportunity for member-borrowers with outstanding loan obligations to get back to good standing and bring their account to current.
After all, having a good and updated standing at the SSS is beneficial not only to your credit standing but also to your future entitlements as a pensioner.
Have you availed of the loan condonation program of SSS for 2018? How was your experience? Join in the discussion by sharing your thoughts in the comments section below.