FINALLY!

The SSS has released Circular No. 2021-014: Pandemic Relief and Restructuring Program 5 – Short-Term Member Loan Penalty Condonation Program just last October 29 with much abated breath. SSS_CI_2021-014 (1).

Over the last few months, employees has been waiting for some sort of loan condonation/ restructuring/ forgiveness from the SSS in vain, especially when the SSS updated their systems and finally informed employers on how much their workers truly owed the SSS last November 2020. I even wrote in depth on how to pay for the big bomb of debt here in my article, HR TALK: What to Do with Employees’ Long Overdue SSS Loans? – Tina in Manila.

But now it’s here! The much awaited SSS loan restructuring program is finally here! And as always dear readers, I will try to make it as simple as possible so you won’t have to read the 5-page circular and stop asking “How?” on Facebook.

Here are the Top 10 Questions Answered on SSS Pandemic Relief and Loan Restructuring Program (STMLPCP):

1. Who Type of Loans are Covered in this Restructuring Program? SA: All short term loans na overdue na.

2. When can we start to apply for the SSS Loan Restructuring Program (STMLPCP also known as PRRP5)? SA: November 15, 2021 to February 14, 2022

3. Who Can Avail of the SSS Loan Restructuring Program? SA: ANYONE who has a past due SSS loan for at least 6 months as of the first day of the condonation period.

4. How much loan amount are we talking about? SA: Yung buong utang niyo po.

5. What are the payment terms? SA: Pwedeng 1-Time, Pwedeng Installment but over 6 months lang.

6. How much penalty will be waived? If you pay on time and follow their instructions, 100% of your loan penalties will be waived.

7. What if I availed of the loan, managed to pay the 50% downpayment but could not keep up with the rest of my 6 loan payments? What will happen then? Your outstanding RL1 will be repackaged to RL2 + Pro-rata penalty that you thought you escaped at 10% interest per year

8.  How to Avail of the SSS Loan Condonation Program? SA: Online – via your mySSS from November 15, 2021

9. Why can’t I access my.SSS Online? The site keeps on crashing! Relax. A lot of people are trying to access the site. Access it after November 15 when the program has opened. Anyway, you have 3 months to avail.

10. What About Companies who were late on SSS contribution payments due to the many lockdowns? Paano naman kami? SA: SSS also has programs for you. 

So let’s start with our usual Question and Answer:

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1. Who Type of Loans are Covered in this Restructuring Program?

Okay, any member who has an OVERDUE short-term SSS loan can avail of the latest SSS Loan Restructuring Program.

SSS Loans that are covered are the following:

1. SSS Loan
2. Calamity Loan
3. Salary Loan Energy Renewal Program (SLERP)
4. Emergency Loan
5. Restructured Loans under the Loan Restructuring Program (LRP) that you applied in 2016 to 2019.

It can be the original loan, or a previously restructured loan. Basta, kung may utang ka sa SSS na delinquent or ibig sabihin ay hindi mo na siya binabayaran for at least 6 months as of November 15, 2021, you can now avail of STMLPCP.

2. When can we start to apply for the SSS Loan Restructuring Program (STMLPCP also known as PRRP5)?

The condonation program will run for 3 months long from November 15, 2021 to February 14, 2021.

After February 14, 2021, we don’t know if it will be extended. So please make sure you apply earlier on. Because it might be YEARS before we have another of this program.

3. Who Can Avail of the SSS Loan Restructuring Program?

a. ANYONE who has a past due SSS loan for at least 6 months as of the first day of the condonation period.

b. You must be below 65 years old by the end of the installment period.

c. You have not yet availed of the SSS permanent total disability or retirement benefit, and

d. You are not disqualified due to fraud committed against the SSS

e. You can avail even if you are the heir or beneficiary of an SSS member who passed away, and you filed the death benefit application, whose contingency date is on or before the last day of the condonation program’s availment period.

4. How much loan amount are we talking about?

Well, it will consist of the outstanding PRINCIPAL (the amount you actually borrowed) plus the total interest of your past due loan. The two will be added together to make one single loan.

Definitions:

• Principal: the money that you originally borrowed from the SSS, and agreed to pay back.
• Interest: Money that SSS charges for you to use the money. Typically for SSS Salary Loans, it’s 10%. For SSS Calamity Loans, it’s 6%.
• Penalty: What SSS charges you IF you are late on your payments. The typical penalty is 1% per month, so if for example, you loaned Php 32,000 and are late to pay, the penalty for that is Php 320.00 per month (Php 32,000 x 0.01 = Php 320.00)

5. What are the payment terms?

There are two payment terms depending on your capacity to pay.

     a. Pay it all in ONE-TIME payment:

If you can pay your consolidated loan within 30 days upon receipt of the notice of approval of the Penalty Condonation Application IN ONE SINGLE PAYMENT.

      NOTE: If the borrowed is 65 years old and above at the end of the installment term, they can only avail of the one-time payment. If the worker is dead, they can pay the one-time payment term through deduction of the proceeds of the Final Benefit Claim. 

      b. You can pay via installment —

Step 1: 50% of the Total Loan (Principal + Interest) within 30 calendar days from receipt of the notice of approval of the penalty condonation application form. IMPORTANT: It must be paid in ONE SINGLE PAYMENT. No staggered payments is allowed.

Step 2: The remaining 50% of the Total Loan (Principal + Interest) will be called a RESTRUCTURED LOAN 1 (RL1) at a rate of a very low 3% per year. It should be paid in 6 equal monthly installments starting from the month after the end of the 30-calendar day period.

        NOTE: If you are late, SSS will charge you a penalty. It’s actually not that bad at a penalty charge of 1% per month charged against the RL1’s unpaid amortization if you paid past your due date.  

Given the very low 3% interest rate for an RL1, I strongly suggest that everyone with an overdue loan avail of this SSS Loan Condonation Program to RESTART their loan without the heavy penalties incurred over the many many years of not paying their SSS Loans.

6. How much penalty will be waived?

a. If you pay it all in ONE-TIME payment: 100% of the total penalty will be forgiven! That’s a lot!

b. If you pay under installment: 50% of the total penalty will be forgiven upon paying the 50% downpayment. The remaining 50% penalty will only be forgiven if the worker applies for the SSS Loan Restructuring Program and pays their RL 1 in full.

IMPORTANT: SSS is serious about you paying in FULL at one single time your SSS Loan Condonation program, be it 100% of your total loan (if you avail of the 1-Time program), or the 50% downpayment of your total loan (if you avail of installment). If you do not follow instructions, all bets are off!

This means, even if you applied and were approved for the SSS loan restructuring program AND YET:

• If you availed of the One-Time Payment, and yet you did not pay for your Total Loan in full or
• If you availed of installment, and yet you did not pay your 50% downpayment in one time

Then your penalty will come back. It will NOT be erased. 

This means, any partial payment will be treated as a regular loan payment and shall be applied to the oldest outstanding ST member loan. The payment will be used to pay for the penalty first, then interest and last the principal. 

If there is any excess payments, then it will be applied to the second oldest overdue loan that you have.

7. What if I availed of the loan, managed to pay the 50% downpayment but could not keep up with the rest of my 6 loan payments? What will happen then?

SSS is clear — The balance of RL 1 MUST BE ZERO by the end of 6 months.

If for example, it is not zero by the end of 6 months, then the unpaid principal of RL1 (Principal + Interest) and its remaining balance of penalty that was tied up to the unpaid debt will be added together to make Restructured Loan 2 (RL2).

The interest for RL2 is at 10% per year, its full amount including all accrued interest is immediately due and demandable. This means that walang takasan — if you are a worker and umalis ka sa work mo, your final pay will definitely be used to pay your outstanding loan sa RL2 without a need for an Authority to Deposit.

8. How to Avail of the SSS Loan Condonation Program?

ONLINE LANG PO!

a. You can apply for the Penalty Condonation program through your own my.SSS account. Hindi pwedeng Over-the Counter unless you are dead, retiring or have disability.

b. When you want to pay, go to the Payment Reference Number (PRN) tab for Consolidated or Restructured Loan payments under Real-Time Processing of Loan.

c. In case you as the borrowed failed to pay for the full 1-time amount or the 50% payment of consolidated loan within 30 calendar days, you CAN resubmit your condonation application again so long as it’s done on or before February 14, 2022.

WARNING: If you still have loan due under the RL1 or RL2 program, you are not allowed to avail any other SSS short term member loan programs until you have paid all your accrued interest and penalties.

9. Why can’t I access my.SSS Online? The site keeps on crashing!

Dude, relax.

It’s just because hundreds and thousands of workers are now trying to log on their my.SSS page to try out the loan condonation program, even though I have already told you, November 15 pa nila ma-access yung SSS Loan Condonation Program.

Don’t worry — from November 15, you have 3 whole months to avail of the program. And everything is done online. So you need not worry of being left behind.

10. What About Companies who were late on SSS contribution payments due to the many lockdowns? Paano naman kami?

Actually there are 5 different loan relief program launched by the SSS this month.

For companies, SSS has launched the Contribution Penalty Condonation Program (PRRP 2). Some notes:

• Under PRRP 2, employers can now pay overdue SSS contributions WITHOUT penalties in full or installment for a period of four to 24 months depending on the amount of delinquency.
• This is only applicable to unremitted or unpaid contributions from March 2020 onwards
• The program will be offered to qualified employers for six months starting November 2021.
• This is open to all delinquent employers or those who have not remitted all contributions due and payable to the SSS as well as those who are not yet registered with the SSS including household employers.

Meanwhile, the Enhanced Installment Payment Program (PRRP 3), allows qualified employers to pay their past due SSS employees contributions and compensation in installments for a period of nine months to 60 months (5 years) depending on the total amount of delinquency.

To avail for both the PRRP2 and PRRP3, employers must prove that their businesses were “affected financially by calamity, man-made disaster, economic crisis, etc.”

HOUSING LOAN 

Those with housing loans can also cheer as they can avail of the Housing Loan Restructuring and Penalty Condonation Program (PRRP4).

Conditions:

• Qualified SSS housing loan borrowers, successors-in-interest, and legal heirs may pay:
  • The outstanding principal, interests, insurance dues and legal expenses of their SSS housing loans in full within 90 calendar days from the receipt of the notice of approval of the application or
  • Pay 50% within 90 days from the receipt of notice of approval and pay the remaining 50% in 12 equal monthly installments.
  • If they can pay the full amount on time, all unpaid penalties will be condoned.

IN SUMMARY

We have repeatedly been waiting for an SSS Loan Condonation program and now that it’s here, what are we waiting for?

Truth be told, it is usually the penalties that truly weigh the member-borrower down and makes up majority of the loan. Through the SSS Loan Restructuring program, members can now pay off the loan and just the interest alone, and starve off the pressure of paying for huge penalties, and finally paying off their loan.

It is also one way for SSS to recover the huge SBWS payout they did last year, where they gave Php 16,000 to every qualified member.

Anyway, I will do my best to help my employees avail of such SSS Loan Condonation. While the sacrifice might be great in the short term, it will really help alleviate everyone’s burden of having that much debt in their system, and is one short step to true financial freedom.

Good luck and hope you avail!

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