Press Release
June 11, 2009

Gordon: SSS condonation program allows speedy settlement
of contribution delinquencies

Senator Richard J. Gordon (Ind.) today said employers with unpaid contributions to the Social Security System (SSS) will now have a chance to swiftly settle contribution delinquencies once the proposed SSS condonation program is approved.

Gordon, chairman of the Senate committee on government corporations and public enterprises, said that when an employer fails to pay social security contributions, he is charged with a penalty of three percent per month until the delinquent account is paid in full.

"In many cases, accumulated penalties of employers already surpass the principal amount of obligation, thereby making it difficult for many employers to settle their delinquencies," he said.

Gordon explained that a contribution delinquency condonation program will facilitate and hasten the extra-judicial settlement of past due contributions from delinquent employers.

"A condonation program would offer reprieve to thousands of employers with financial woes, while enabling their employees to resume their entitlement to benefits and loans," he said.

Gordon's Senate Bill 2454, which was recently approved on second reading, proposes the condonation of penalties on delinquent social security contributions.

The senator explained that the program would cover all employers who are delinquent in the payment of their contributions including those with cases, involving the collection of contributions and penalties, pending before the Social Security Commission, the courts and prosecutor's office. Also included are employers whose cases were already adjudged but have not yet complied with the judgment.

Under the measure, the employer must submit the corresponding list and pay the principal obligation either in full, within a period of 12 months, or in installment, within a period of six months, from the effectivity of the Act.

"This condonation program of contribution penalties represents an opportunity to immediately settle contribution delinquencies. It also paves the way for resumption of members' entitlement to benefits and loan privileges," Gordon said.

The SSS has twice implemented condonation programs on penalties for contribution delinquencies in 1987 and 1997. By the end of the second program in 1997, the SSS was able to collect P859-million in delinquent contributions.

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