SSS to open application for loan consolidation, penalty condonation

MANILA, Philippines — Members of state-run pension fund Social Security System (SSS) may soon apply for loan consolidation and penalty condonation programs to give them an opportunity to clear out their delinquencies.

In its latest circular, the SSS has released the guidelines on the consolidated loan program with condonation of penalty, which will start on Sept. 30.

This comes after SSS approved the consolidation of past due short-term member loans (STML) with condonation of penalty last June.

All past due STML include salary loan, calamity loan, emergency loan and restructured loans.

Past due STML are loans that have unpaid obligation consisting of principal, interest, and penalties equivalent to more than three monthly amortizations or that the loans have remaining unpaid balance after its maturity.

With SSS set to open the application, all outstanding principal and interest of the member-borrower’s past due loans will be combined into one consolidated loan upon application.

Unpaid penalties, on the other hand, will be consolidated separately and will be subject to conditional condonation.

Eligible members are those with past due loan accounts, have not been granted any final benefit or disqualified by the SSS, and have active online accounts.

SSS said members would be allowed to pay in full or in installments. For installment plans, downpayment of at least 10 percent of the consolidated loan should be paid within 30 days of application approval.

The remaining balance should be payable in equal monthly amortization from six months to five years depending on the remaining loan balance.

For the conditional condonation, 100-percent of the consolidated penalty will be condoned upon full payment of the consolidated loan with the approved payment period.

Should a member apply for retirement or claim disability or death benefit, the SSS said any unpaid consolidated loan balance would be deducted from the benefit proceeds.