22nd Jul 2019
The Social Security System (SSS) recently issued a reminder/notice to all employers of the current SSS Condonation Program and the fast approaching deadline, to avail of the program.
Under the law, a penalty of three percent (3%) per month is assessed on unremitted contributions. This penalty continues to accrue and to compound, from the date when the contribution falls due, until fully paid. In addition to this penalty, interest and penal liabilities may result from non-compliance with the SSS law and for non-payment of SSS contributions.
Under the auspices of the recently enacted Social Security Act of 2018, which took effect on 05 March 2019, the SSS implemented its SSS Contribution Penalty Condonation Program. This program allows unregistered employers, employers with unremitted or unpaid past contributions, or who have otherwise not remitted all contributions due and payable to the SSS, and those with pending cases filed by the SSS, to pay to the SSS these unpaid contributions without penalty.
It must be noted that, unlike the Bureau of Internal Revenue, which is expressly allowed under the Internal Revenue Code of the Philippines to issue compromises or waive penalties, when it comes to payment of delinquent national government taxes, the SSS has no express authority to waive or condone penalties. As a matter of fact, an act of Congress is required before an SSS condonation program can take place.
The last condonation was in 07 January 2010, passed through Republic Act No. 9903, otherwise known as “An Act Granting the Social Security System One-Time Authority to Condone Penalties on Unremitted or Delinquent Contributions by Employers.” The next condonation program is currently on-going, but only for a six (6) month period, which commenced when the law took effect in March 2019.
The SSS enumerated those employers who may avail of the program, to wit:
a. Any employer who is delinquent, or has not remitted all contributions due and payable to the SSS;
b. Those not yet registered with the SSS, including household employers;
c. Those with pending or approved proposal under the existing Installment Payment Scheme Program of the SSS;
d. Those with pending or approved application under the SSS Program for Acceptance of Properties Offered Through Dacion En Pago;
e. 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;
f. Those against whom judgment had been rendered either by the SSC or the regular Courts but have not complied with the judgment;
g. Those who settled all contributions before the effectivity of R.A. No. 11199 but with unpaid or partially paid penalty/ies for none or late remittance, and
h. Those against whom a Warrant of Distraint/Levy/Garnishment (WDLG) or Encumbrance had been issued.
The unpaid premiums may be paid in full, or through installment, subject to approval by the SSS of the installment payment proposal.
Employers with cases which are pending with the SSS, 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 refiling of the case by the SSS in the event that the employer defaults in the payment of any installment due under the approved proposal.
However, there is a fixed timeline to avail of the condonation program. The SSS warns that the condonation program is for six (6) months, and that they will be accepting applications only until 06 September 2019.
Thus, all employers are encouraged to avail of this once in a blue moon opportunity. The SSS issued Circular 2019-004 for employers who would like to avail of the condonation program. You can access the circular by clicking on this link: Circular 2019-004.
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