TAÑADA ON THE SSS CONDONATION BILL APPPROVED BY BICAM “ IT’S A MINI-STIMULUS PACKAGE”

Office of Rep. Lorenzo R. Tañada III
Chairperson: Committee on Human Rights
Northwing 409, House of Representatives, Quezon City
telefax: 9316478 or 9315001 loc. 7368 email:erin_tanada@yahoo.com
News Release- October 7, 2009 References: Erin Tanada-09193688555 Media officer: Laurice Ramos- 09228433311
TAÑADA ON THE SSS CONDONATION BILL APPPROVED BY BICAM
“ IT’S A MINI-STIMULUS PACKAGE”

Rep. Lorenzo “Erin” R. Tañada III  (Liberal Party, 4th District, Quezon) hailed the approval of the SSS Condonation Bill by the congress and senate bicameral ommittee representatives. The said bill will grant the Social Security System a one-time authority to condone 100% of the penalties slapped on unpaid employers’ remittances, while providing installment options for those who would like to settle through staggered payment in a period of 48 months.  
He called it a triple mini-stimulus package because first, it provides a strong incentive for companies that have been in arrears on their principal payments for their employees’ contributions to immediately settle what is due and overdue, minus the huge burden of dealing with the delinquency penalties that have been slapped on them.  According to Tañada, the 3 percent a month penalty is indeed burdensome and once in arrears and not quickly addressed, it can really pile up.  So this is a stimulus package for these troubled companies, companies that, by and large, do not want to be delinquent in the first place, but because of the series of crises that hit our country, failed to remit what is due as the employers’ share for their employees contributions to SSS.
Second, he said that by providing this breathing space for troubled companies, we are actually helping SSS to immediately collect an estimated more than P50 billion of the P95 billion overdue principal payments which would otherwise be difficult to collect.  A lot of troubled companies choose not to pay what SSS demands of them because the penalties that have accumulated are actually bigger than the principal that they should have been paid. Of the P325.5 billion that is collectible by SSS as of 31 May 2008,  P230.82 billion is accounted for by penalties and only P94.6 billion is accounted for by the principal payments that are due. Past SSS condonation experience shows that on average, 60% of those which have accumulated principal payments chose to settle what is due in outright cash.   Sixty percent of P94.6 billion is P57 billion which could easily beef up SSS’ coffers.  That is the stimulus package for SSS.
Third, Tañada thinks that this is the most important and immediately needed stimulus package directed at ordinary, privately employed individuals.  “With collected and settled principal payments for the SSS members’ contributions, they can now avail of the privileges of a good standing SSS member – claim benefits and get loans – benefits that would otherwise not be available had their principal payments remain unsettled.  That’s the stimulus package for ordinary, privately employed individuals.”
Tañada, who chaired the technical working group of the Committee on Government Enterprises and one of the principal authors of the bill, shared that the bicam members were quite conscious in finding a middle ground so that they are able to help companies which have been unable to settle obligations with the SSS without sacrificing SSS’s financial viability and actuarial life.   
“We were also quite conscious that we do not unduly reward those who have been remiss with their obligations to the disadvantage of companies who have been very diligent in making timely payments to the SSS. The 100% condonation of penalties applies only to cash payments of all delinquent accounts. Those who will opt to pay thru installment basis will still have to pay a 5% downpayment on principal amount amount and a 3% per annum interest through a period of 48 months,” he described.
“ Those which have pending cases against them by the SSS because of their delinquency status would also be allowed to avail of the condonation, while those who will not will still be legally accountable to the SSS.” he ended.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: