Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
Second Regular Session

5342

House Bill No.

Introduced by AKBAYAN Representatives
Ibarra “Barry” M. Gutierrez IIT and Walden F. Bello

EXPLANATORY NOTE

‘The annual report of the Social Security System for the year 2012 states that through the
SSS Loan Condonation Program for individual members — which granted pattial to full
amnesty on loan penalties to about 208,502 delinquent borrowers ~ the System was able to
collect a total of PhP 2.878 billion, an amount which surpassed the 2012 target of PhP
2.432 billion. This means that delinquent borrowers would mote likely avail themselves
of a condonation program to pay loans but would avoid settlement of mandatory
obligations without such a program because of the fear of high rates of penalties

accumulated through the years.

This bill seeks to provide the Social Security Commission the authority to compromise,
waive or release, in whole or in part, penalties imposed upon delinquent contributions
whenever an employer demonstrates a clear inability to pay assessed delinquencies. More
importantly, this measure would be a welcome development for ordinary and privately
employed individual-members of the System, who would be able to avail of the privileges
enjoyed by members of good standing which would otherwise not be available under the

existing law.

Under Section 22 (a) of Republic Act No. 1161 or the Social Security Law a penalty of
three percent a month is assessed on unremitted contributions. For troubled companies
which do not want to be delinquent in the first place, this penalty and the presumptive

delinquency under Republic Act No. 1161, is a nightmare they would not want to face.



‘This measure provides a strong incentive for those that have been arrears on theie

principal payments for their employees’

contributions to immediately settle what is due
and overdue because of the possibility of eliminating the huge burden of dealing with
delinquency penalties

In view of the foregoing, immediate approval of this measure is earnestly sought.

IB. “BARRY \TIERREZ IL WALDEN F. BELLO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
Second Regular Session

5342

House Bill No,

Introduced by AKBAYAN Representatives
Ibarra “Barry” M, Gutierrez [II and Walden F. Bello

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AN ACT
AUTHORIZING THE SOCIAL SECURITY COMMISSION TO CONDONE
PENALTIES ON DELINQUENT CONTRIBUTIONS, FURTHER
AMENDING REPUBLIC ACT NO, 1161, OTHERWISE KNOWN AS THE
“SOCIAL SECURITY LAW”

Be it enacted by the Senate and House of Representatives of the Philippines in Congress asiembled:

SECTION 1. Amendatory provision—Section 4(a) of Republic Act No. 1161, as

amended, is hereby further amended to read as follows:

“Section 4. Powers and duties of the Commission and of the
SSS.

@) The Commission —For the attainment of its main
objectives as set forth in Section 2 hereof, the
Commission shall have the following powers and duties:

(1) To adopt, amend and rescind, subject to the
apptoval of the President of the Philippines, such rules
and regulations as may be necessary to carry out the
provisions and purposes of this Act;

Q) To establish a provident fund for the members
which will consist of voluntary contributions of
employers and/or employees, self-employed and
voluntary members and their earnings, for the payment of
benefits to such members or their beneficiaries, subject to



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such rules and regulations as it may promulgate—and

apptoved-by the President of the Philippines;

Q) _ To maintain a provident fund which consists of
contributions made by both the SSS and its official
employees and their earnings, for the payment of benefits
to such officials and employees or their heirs under such
terms and conditions as it may prescribe;

(4) To approve restructuring proposals for the
payment of due but unremitted contributions and unpaid
Joan amortizations under such terms and conditions as it
ay prescribe;

(5) To authorize cooperatives registered with the
cooperative development authority or associations
registered with the appropriate government agency to act
as collective agents of the SSS with respect to their
members: Provided, That the SSS shall accredit the
cooperative or association: Provided, further, That the
persons authorized to collect are bonded;

(To compromise or release, in whole of in patt, any
interest, penalty or any civil liability to SSS in connection
with the investments authorized under Section 25 hercof,
under such terms and conditions as it may ptescribe-and

apptoved-by-the Presidentofthe Philippines; and

@) Any _law tothe contrary notwithstanding, to

release, in wl
regardle: vs et such
it_ma ¢ wl n
ve eaaelel
assessed delinquency,
1 Commissi si oe Senate of th
ou ppines and to the Hl f the Representatives of
es jal_r on the exercise o}

power under this Subsection in order to determine that
the said power was reasonably exercised and that the SSS

not unduly deprived of revenues, stating therein the
following facts _and_information, to wit: Names and
addresses of employers whose penalty delinquencies havé
been the subject of compromise or condonation, Amount
involved, Amount compromised or condoned, and the
Reason/s for the exercise of the said power

(8) _ To approve, confirm, pass upon or review any and
all actions of the SSS in the proper and necessary exercise
of its powers and duties hereinafter enumerated.



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SECTION 2. Implementing rules and regulations—The implementing rules and
regulations to carry out the amendments introduced by this Act shall be adopted and
promulgated by the Commission not later than ninety (90) days after the effectivity of

this Act,

SECTION 3. Separability clause—If, for any reason, any part, section ot provision of
this Act is held invalid or unconstitutional, the remaining provisions not affected thereby

shall continue to be in full force and effect.

SECTION 3. Repealing claus

issuances or parts thereof which are inconsistent with the provisions of this Act are

All laws, decrees, orders, rules, regulations and other

hereby repealed or modified accordingly. Republic Act No. 1161 is amended accordingly.

‘This Act shall take ef

SECTION 4. Effectivity clause.

completion of its publication in the Official Gazette ot in at least two (2) newspapers of

ct fifteen (15) days after the

general circulation,

Approved,