SSS Condonation 2019 Under R.A. 11199 or the Social Security Act of 2018

SSS Condonation program has been set to run for six (6) months from the date of effectivity of R.A. 11199 or the Social Security Act of 2018. Program means the Condonation Program as provided under Section 31 of R.A. 11199.

R.A. 11199 repealed the former SSS laws, R.A. 1151 and R.A. 8282, including all other laws, proclamations, executive orders, rules and regulations or parts thereof. (Sec. 33, R.A. 11199)

Under the condonation provision, any employer who is delinquent or has not remitted all contributions due and payable to the SSS may, within six (6) months from the effectivity of R.A. 11199, remit said contributions or submit a proposal to pay the same in installment within a period as approved by the Commission from the effectivity of said law without incurring the prescribed penalty. This is subject to the implementing rules and regulations which the Commission may prescribe.

An employer may choose to avail of the Program within six (6) months from the effectivity of R.A. 11199. (Sec. 8, Circular 2019-004)

On March 15, 2019, the SSS, pursuant to its powers and duties set forth under Sec. 4 (1) of R.A. 11199, issued Circular No. 2019-004 or the rules and regulations for the effective implementation of the condonation provision of the law.

View the PDF copy of SSS Circular No. 2019-004 (including the PDF versions of the Application for Installment Proposal, Promissory Note and Notice of Approval)

Under said SSS circular, any employer who is delinquent or has not remitted all contributions due and payable to the Social Security System (SSS) may avail of the Program of the SSS, including the following:

1. Those not yet registered with the SSS, including household employers;
2. Those with pending or approved proposal under the existing Installment Payment Scheme Program of the SSS;
3. Those with pending or approved application under the SSS Program for Acceptance of Properties Offered Through Dacion en Pago;
4. Those with pending cases involving collection of contributions and/or penalties or non-reporting of employees before the SSC, the regular Courts or the Department of Justice or Office of the Prosecutor;
5. Those against whom judgment had been rendered either by the SSC or the regular Courts but have not complied with the judgment;
6. Those who settled all contributions before the effectivity of R.A. 11199 but with unpaid or partially paid penalty/ies for none or late remittance, and
7. Those against whom a Warrant of Distraint/Levy/Garnishment (WDLG) or Encumbrance had been issued

Prior to availing of the Program, unregistered employers shall register first with the SSS Branch/Office having jurisdiction over their place of business or household. (Sec. 2, SSS Circular 2019-004)

Employers with pending or approved proposals under the installment payment scheme program

There may be employers with pending or approved proposals under the installment payment scheme program. For such employers to avail of the Program they shall remit the contribution in full or submit an installment proposal under the SSS Circular 2019-004.

Upon remittance of the contribution delinquency in full or submission of an installment proposal under said Circular, a pending installment proposal submitted under other rules shall be considered withdrawn. The submission of an installment proposal under SSS Circular 2019-004 shall have the effect of terminating an installment proposal approved under other rules, and the remaining post-dated checks received by the SSS for the latter shall be returned to the employer upon issuance by the latter of the post-dated checks required under SSs Circular 2019-004. (Sec. 3, Circular 2019-004)

Employers with pending or approved application under the SSS Program for Acceptance of Properties Offered Through Dacion en Pago under other rules issued by the SSC

Employers with pending or approved application under the SSS Program for Acceptance of Properties Offered Through Dacion en Pago under other rules issued by the SSC allowing employers to pay their delinquencies through dacion en pago shall remit the contribution delinquency in full or submit an installment proposal under SSS Circular 2019-004. (Sec. 4, Circular 2019-004)

Upon remittance of the contribution delinquency in full or submission of an installment proposal by an employer under SSS Circular 2019-004, a pending dacion en pago application shall be considered withdrawn. The submission of an installment proposal by an employer under SSS Circular 2019-004 shall have the effect of annulling an approved dacion en pago application if the title to the property is not yet transferred to the SSS. (Sec. 4, Circular 2019-004)

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An employer without a dacion en pago application may opt to settle its contribution delinquency through dacion en pago but subject to such rules and guidelines in the acceptance of properties offered through dacion en pago under Circular No. 6-P (29 January 2002).

Employers with pending cases

All pending cases involving collection of contributions and/or penalties or those involving non-reporting of employees shall be withdrawn upon payment in full or approval of installment proposal, without prejudice to the revival or refilling of the case by the SSS in the event that the employer defaults in the payment of any installment due under the approved proposal. (Sec. 5, Circular 2019-004)

SSS Circular 2019-004 applies only to penalties on unremitted or delinquent contributions up to the applicable month of January 2019. Penalties on contributions falling due thereafter shall not be covered by the Program but shall be paid as prescribed by law. (Sec. 6, Circular 2019-004)

Section 7 of SSS Circular 2019-004 provides that for reason of equity, the accrued penalties of the following employers shall likewise be subject of condonation:

1. Those who settled in full all their arrears in contributions before the effectivity of the Social Security Act of 2018 (R.A. 11199); and
2. Those who settled partially their arrears in contribution before the effectivity of R.A. 11199 and pay the balance in full or in installment under the Program

The following are the modes of availing of the Program: (Sec. 9, Circular 2019-004)

1. Remit within the period of the Program the full amount of the delinquent contributions through any SSS Branch/Office with tellering facility or authorized collection agent of the SSS; or
2. Submit a proposal within the period of the Program to pay the delinquent contributions in installment to the SSS Branch/Office or Large Accounts Department having functional jurisdiction over its place of business or household.

In any case, the employer shall submit the corresponding Collection List/s upon availment and within the period of the Program. (Sec. 9, Circular 2019-004) He may also submit the proposal to pay in installments. (Sec. 22 [a], R.A. 11199)

If the employer opts to submit an installment proposal, the Head of the SSS Branch/Office or Large Accounts Department to which the proposal was submitted shall give due course to approve and grant the same, subject to the following requirements: (Sec. 10, Circular 2019-004)

1. Upon submission of the proposal, the employer shall remit a down payment equivalent to at least five percent (5%) of its total contribution delinquency;
2. Together with the proposal, the employer shall submit an instrument/promissory note promising to pay the balance of the delinquency in equal monthly installments within a period not exceeding forty-eight (48) months, the first monthly installment of which shall fall due within thirty (30) days after date of approval of the proposal; and
3. The installment payments shall bear an interest of six percent (6%) per annum.

If the employer is an association, partnership, corporation or any other institution, any of its present managing head, director or partner shall sign the proposal and the instrument/promissory note in his/her official capacity, attaching therewith a Secretary’s Certificate in case of a corporation.

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In case the employer has already been dissolved, any of its former managing head, director or partner shall sign the proposal and the promissory note

Upon approval of the proposal, the employer has the following obligations: (Sec. 10, Circular 2019-004)

1. It shall issue the corresponding post-dated checks payable to the SSS to cover all monthly installments, and cause the replacement thereof within a reasonable period whenever necessary as in the case of change of its authorized check signatory or closure of bank account.
2. It shall remit current contributions every month as they fall due.

Failure by the employer to comply with any of the above requirements shall automatically terminate the approved installment proposal. This shall have the same effect as in the case of the employer that defaulted in the payment of any installment under the approved proposal.

Upon remittance in full of the delinquent contributions or approval of installment proposal of the employer, the short-term loan privileges of their employees shall be restored, provided, that the said employees comply with other requirements of their loan applications. However, said privileges shall again be suspended in the event of violation of any of the terms and conditions hereof. (Sec. 11, Circular 2019-004)

In case the employer fails to remit contributions within the six-month grace period or defaults in the payment of any amortization provided in the approved proposal, the prescribed penalty shall be imposed from the time the contributions first became due as provided in Section 22 (a) of the law.

Section 12 of SSS Circular 2019-004 provides that failure to remit in full the required contribution or if the employer defaults in the payment of any installment under the approved proposal within the period provided, the penalties are deemed reimposed from the time the contributions first became due, to accrue until the delinquent account is paid in full.

Section 22 (a) of R.A. 11199 provides that the contribution imposed shall be remitted to the SSS within the first ten (10) days of each calendar month following the month for which they are applicable or within such time as the Commission may prescribe. Every employer required to deduct and to remit such contributions shall be liable for their payment and if any contribution is not paid to the SSS as prescribed the delinquent employer shall pay besides the contribution a penalty thereon of two percent (2%) per month from the date the contribution falls due until paid.

Further, in the same Section 22, if deemed expedient and advisable by the Commission, the collection and remittance of contributions shall be made quarterly or semi-annually in advance, the contributions payable by the employees to be advanced by their respective employers. Upon separation of an employee, any contribution so paid in advance but not due shall be credited or refunded to his employer.

The penalty shall be condoned when and until all the delinquent contributions are remitted by the employer to the SSS. (Sec. 13, Circular 2019-004)

Upon approval and payment in full or in installments of contributions due and payable to the SSS, any pending case filed against the employer shall be withdrawn without prejudice to the

(1) refiling of the case in the event the employer fails to remit in full the required delinquent contributions or defaults in the payment of any installment under the approved proposal and

(2) the reimposition of the prescribed penalty from the time the contributions first became due as provided in Section 22 (a).

R.A. 11199 provides that the effectivity shall be fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation. (Sec. 34, R.A. 11199)

R.A. 11199 was published in the official Gazette on February 18, 2019 thus, based thereon it took effect after the 15^th day, March 5, 2019, or on March 6, 2019. The six-month period shall run until September 6, 2019.

Employers who fail to meet the deadline in accordance with the SSS Requirements will not be able to claim benefits under the law.