The Social Security System (SSS) classifies its members into three categories - employers, self-employed and voluntary members. Both self-employed and voluntary members can opt to pay voluntarily and are entitled to a salary loan if they are eligible. Eligibility requirements include a) currently contributing SSS member; b)member has not been granted total permanent disability, retirement and death benefits; c) member is below 65 years of age; and d) member has not been disqualified due to fraudulent actions as determined by SSS.
The loan may either be a one-month or a two-month loan. The former requires that the SSS member has 36 monthly contributions while the former necessitates that the member has 72 monthly contributions. For both loan types, the freelancer member must have had at least six (6) monthly contributions prior to loan application. Other loan types include calamity and emergency loans.
The loanable amount is the average of the latest 12 monthly salary credits (I have yet to know what this means). Loans may be payed by check, savings account, Unified Multi-Purpose (UMID) - ATM Card, or a cash card. If the freelancer member's 10-digit SSS ID number ends in either 1 or 2, the freelancer must pay his or her dues every 10th day of the month. This reminds of the color coding scheme in Metro Manila. As I was saying, self-employed members need to be aware of their SSS IDs especially the last digit as it corresponds to the payment deadline as stipulated in the MLP-01213 Form (effective July, 2015). The said document is necessary when applying for a salary loan. Along with the document, the freelancer member must also submit an orginal copy of a primary ID card (SS card, UMID card, driver's license, passport, PRC license, Seaman's book).
In summary, a freelancer in business need not worry when projects become scarce or earnings become depleted due to suspension or any other unforeseen events. One of the solutions to this problem, it seems, is to have a sound SSS savings. Savings are our very important ally during critical times. We save because we care about the perpetual health of our freelancing business.
I used to have an employer account with SSS before and that was when I was still paying for the SSS monthly contributions of my house helper who was taking care of my son. Yesterday, I browsed through my SSS Employment Report and I noticed that at the upper right hand corner of the document, there were two boxes under the employer type category - regular and household. At the back of the document, it is stated that:
"The owner of a single proprietorship business is disqualified to be reported as an employee thereof. However, he may register as a self-employed member, provided he is not over 60 years old."
The statement applies to regular employers.
As for my "self-employed"membership verification status, I had a total of 93 monthly contributions as of June, 2015. I have yet to secure a copy of all my contributions to date.
As for freelancers who may wish to borrow from SSS but lack the required primary documents stated above, other documents may be recognized by the system as long as two of these documents will be submitted upon application and that at least one of these has the signature and photo of the borrower-member.
These are the secondary documents:
1) Alien Certificate of Registration
2) Qualification Documents from Maritime Industry Authority
3) Certificate of Muslim FilipinoTribal Affiliation
4) Credit Card
5) Firearm License Card
6) Fishworker's License
7) Health Card
8) Pag-IBIG Member's Data Form
9) Local Government Unit-issued ID Card
10) Marriage Contract
11) Overseas Worker Welfare Administration (OWWA) Card
12) PhilHealth ID Card
13) Police Clearance
14) Postal ID Card
15) School ID Card
16) Voter's Identification Card
17) Taxpayer's Identification Number (TIN) Card
Other details relating to Membership Loans may be gleaned from their website at https://www.sss.gov.ph/.
After fetching my son from his summer school (which, hopefully, will be his home school in the near future), I finally was able to visit an SSS Service Office - in a mall. There is a nearby SSS satellite office near my place of residence but the application process must start as early as 6:30 AM (and this will be an impossibe feat given my circumstances).
As I was saying, I previously had a copy of the member loan application form so I was able to prepare the necessary documents that I will be submitting along with my application form. I used a black ink in accomplishing the MLP-01213 Form.
I photocopied my UMID card and proceeded to the receiving counter. After document verification, I was instructed to go to the next counter.
I thought it was going to last a decade because there were lots of applicants. After sitting for a maximum of 3 minutes, however, my number got called. The data entry process took a few minutes, too. Although the amount I stated in my application form did not match with the amount that was granted to me, I was suprised to know that my loan got approved in five minutes. I felt ecstatic that I actually have clean credit records and that I am capable of having a salary loan! Hahaha!
It looks like the loanable amount for freelancers applying for this type of member loan can vary depending on the amount of average monthly contributions for the last 6 months prior to the loan application. I just find it mysterious that I was granted an amount higher than the range that I was paying for. It is possible that my previous monthly contributions have been considered.
I was given an acknowledgment stub to seal the application process. I was told that the check will be available in two to three weeks and that I can start paying the next month following the schedule corresponding to the last digit of my SSS number. I learned that payments may be made via "Bayad" centers, the SM Business Center, through banks and other means.
So there it is. Are Filipino freelancers capable of having SSS benefits? I just rolled out one benefit. Why is it that self-employed individuals can avail of a salary loan? Is it because we get terminated only by our (former) superiors but never by the system as long as we continue to contribute to it?
The check finally arrived today as a registered domestic mail. I started my application last 9th day of May, 2017. It seems that it was mailed one week after my application. The mailman did not show interest in getting my claim stub. He was looking for my SS ID. On a piece of paper, he asked me to affix my signature using a black pen.
The check revealed the following information:
Part A: Salary Loan Check and Voucher
1. date the check was issued
2. loan type
3. month and year for deduction (or payment) to start
4. amount of loan
5. monthly amortization
6. service fee
7. check amount
8. ER ID number
9. SS number
10. my full name
11. my postal address
12. check number
It specified the name of the bank the check needs to be encashed plus a notification stating that the loan will be cancelled if the check will not be encashed within 3 months.
I also noticed the specific warning in regards to unpaid amortizations. The check stated that a penalty of 1% of the amount to be paid from due date to actual date of payment will be charged to the borrower.
Part B: Check
The amount stated in the check is my loanable amount minus the 1% service fee.
It looks like my payment deadline will be every 20th day of the month starting on July, 2017. The whole amount will be amortized for a duration of two years or 24 months.
I learned, further, that if at least 50% of the principal amount will be paid, then I will be allowed to create another loan application.
In summary, I have until August 9, 2017 to faciltate the conversion of my check to cold cash. However, deductions or voluntary payments must start as early as July, 2017.
In light of the most recent attempts to secure the site, I wondered about the plight of freelancers on "hot list" who are renting their house and do not have their names on utility bills such as Meralco and Manila Water (or NAWASA). I had the chance to revisit my files and I came up with these:
Both the envelope and the voucher have the name and address of the member-borrower. Loan documents may save our virtual (and physical) lives just in case tax and bank documents fail.
It seems that just like the housing loan, SSS loan payments may be made in advance and can have a reduced impact in terms of interest. Furthermore, when 50% of the loaned amount has been paid for, one may apply for a new loan.
What surprised me is that the UMID card which served as my SSS card in the past may now be used as an ATM card provided that it gets processed at a specific bank first. The card may serve as a cash card in which SSS loan proceeds may be withdrawn by the loan applicant. This seems to be another alternative to the check option which can take up wo 4 weeks before it is delivered to the addressee.
The bank which specifically processes the UMID card for loan transactions does not deal with self-employed individuals. In order for UMID card to be accepted as a "cash card", the owner of the card must be an employee in both government and private institutions.
It looks like even when an SSS loan has been fully paid already, the renewal of loan application is still tightly associated with the loan term and this is quite a serious relationship. Specifically, interest rates get to have a reduced impact when the loan is paid ahead of the due date. But the loan term must at least be 50% before another loan application may be done.
Consequently, a BIR-registered, sole proprietor is likely to have a chance at having a business development or a small enterprise loan granted.
The only thing that is quite mind-boggling is the fact that former employees who have become sole proprietors are encouraged to stay as voluntary members. The self-employed status is primarily awarded to employers who have employees under them and I am not sure if BIR-registered agency owners who have administrative officers and members can fall under this category.
I have yet to find out if former household employers turned sole proprietors can avail of either of the loans that I have mentioned above.
Guys and gals,
Upwork freelance contractors and clients who belong to the self-employed and voluntary membership categories are reminded to pay any missed SSS contributions for the year 2018. The deadline will be extended from the 2nd until the 31st day of January, 2019 for the last quarter payments.
The SMS I received says that for immediate processing of our SSS contributions we can use our PRN by logging on to the SSS website. If I remember it correctly, our SSS passwords are like food items -- these have an expiration date.
Speaking of SSS contributions, I have some questions:
1.) If my work-from-home business is a registered business then is it considered as a household business?
2.) If it is a household business, then is it possible for me to offer a contract to an assistant and pay for her SSS premiums?
3.) If it is possible for me to offer a contract to someone who is in my household and she is pregnant then can I offer maternity benefits to my household employee?
4.) Are there SSS employees here who happen to be Upwork users?
5.) To what extent is Upwork's ToS tolerant of such business activities?
6.) Is this kind of activity considered as "farming"?
Items 5 and 6 are addressed to either the Community Manager or one of her mighty moderators.
I finally found one thread which seems to clarify the issue on working-from-home as a "household" business: https://community.upwork.com/t5/Freelancers/AGE-FOR-WORK/m-p/546149#M332495.
I think it's Earid who cited the exact ToS section.