A lawmaker has filed a measure condoning the penalties on delinquent contributions and loans of Social Security System (SSS) members.
In House bill 5807, Rep. Rene Relampagos of Bohol proposed to determine the monthly salary credits, schedule and rate of contributions, benefit increases and rate of penalty on delinquent contributions and unpaid loan amortizations of SSS members.
Relampagos said the bill authorizes the Social Security Commission to compromise or release, in whole or in part, any interest, penalty or any civil liability to SSS accruing from unpaid member loans subject to the approval by the President.
The bill seeks to amend Republic Act 1161, otherwise known as the Social Security Law.
“Under the present provisions of the Social Security Law, the Commission cannot increase the minimum and maximum monthly salary credits, the schedule and the rate of contributions as well as the rate of benefits without securing the approval of the President of the Republic of the Philippines. This process is usually tedious and takes a determinable time,” Relampagos, chair of the House committee on tourism, said.
Relampagos said the proposed amendment is similar to the powers given to the governing boards of Government Service Insurance System (GSIS), the Home Development Mutual Fund, Philhealth and the National Internal Revenue Code.
Relampagos said the governing boards of GSIS, Philhealth and HDMF can exercise these powers without the approval of the President.
“This proposal is based on the theory that operational details and accounts management are the province of the Commission and the SSS, the ones entrusted with the mandate of running the affairs of the country’s social security system including the exercise of discretion and flexibility in managing its own affairs,” Relampagos said.
Relampagos said there is a big number of billing or demand letters issued against employers-members of the SSS.
He said the amount of contribution-delinquency is computed based on presumptive delinquency under SSS Law but subject to reconciliation records.
Relampagos said the Large Account Division of SSS has a collectible of P1.033 billion as of May 26, 2014 from delinquent employers. At least P408 million is accounted for by penalties and P625-9 million is for contributions that are due.
“By providing a breathing space, we are actually helping SSS to immediately collect about P625.9 million overdue SS contributions which would otherwise be difficult to collect. It is not a secret that companies choose not to pay what SSS demands of them because of penalties slapped upon them that have accumulated through the years which, at times, are actually bigger than the principal that should have been paid,” Relampagos said.
If passed into law, Relampagos said the bill shall provide for a strong incentive for those that have been in arrears in the payment of their employees’ contributions to immediately settle what is due and overdue, minus the high burden of dealing with the delinquency penalties.
