Electronic Letter of Authority as per RMO 62-2010

Revenue Memorandum Order No. 62-2010 prescribes the supplemental guidelines on the electronic issuance of Letters of Authority (LA) and related audit policies and procedures.

A very important provision that taxpayers need to know is under point #6... Taxpayers who are in possession of manually prepared LAs/TVNs shall not entertain any Revenue Officer relative to the audit of his internal revenue taxes for the taxable year 2009 unless replaced with an eLA.


How does an eLA look like?  Funny as it is, the examiners are ignorant themselves how it looks.  As prescribed under point#8 same type of paper being used in printing of Certificate of Registration will be used.  As of the moment, it will look like a plain sheet of paper unlike the usual LA.  

What the RDOs are doing now, is issuing LAs and backdating them to June 25; nevertheless, it does not excuse them from complying with the above RMO.

Download full text here:
ftp://ftp.bir.gov.ph/webadmin1/pdf/52266RMO%2062-2010.pdf

Duties and Responsibilities of SSS Members

What are the duties and responsibilities of SSS employee-members?An SSS member should:

1. secure their SS numbers;
2. ensure that they are reported for coverage under the SSS by their employers;
3. pay their monthly share of contributions and ensure that these contributions are remitted to the SSS by their employers;
4. ensure that SSS Form R3’s (Contributions Collection Lists) where their name are included, are submitted to the SSS by their employers;
5. pay their monthly loan amortization, if any, thru salary deduction and to ensure that these payments are remitted to the SSS by their employers;
6. update or correct their personal records with the SSS by submitting a duly filled-up SSS Form E-4 (Member’s Data Amendment) and supporting document/s to avoid delays in the processing of benefit claims; and
7. be conscious of changes and improvements in SSS policies and benefit structure.

What are the duties and responsibilities of an SSS employer-member?
An employer is obliged to:

1. require the presentation of the SS number of a prospective employee;
2. report all employees for SS coverage within thirty (30) days from the date of employment by submitting an accomplished SSS Form R-1A (Employment Report ) at the nearest SSS office;
3. deduct from the employees the monthly SS contributions based on the schedule of contributions; pay their share of contributions including Employees’ Compensation (EC) and remit these contributions to the SSS or accredited banks within the first the (10) calendar days following the month when said contributions are due and applicable.
4. Submit a summary of all employees’ contributions thru SSS Form R-3’s (Contribution Collection List) together with a copy of the Special Bank Receipt (SBR) and SSS Form R-5 ( Payment Return Form) within 10 days after the applicable quarter;
   
   An employer may also participate in the SSSNet, a computer service using the electronic data interchange technology, designed to hasten the posting of employees contributions for faster processing and availment of benefits and loan privileges.
   
   Or, the employer may opt to participate in the R3 Tape/Diskette Project which allows the submission of the monthly summary of employees’ contribution thru a computer tape or diskette. This system is a better alternative to manual reporting as its minimizes encoding errors and processing time.
   
5. issue official receipts and maintain official records of employment and deductions for all contributions subtracted from their employees every month or indicate such deductions from the employees’ pay envelopes;
   
   A household employer should submit an accomplished SSS Form R-3 (Contributions Collection List) and indicate in the appropriate box as a household employer. Submit this together with the SSS Form R5’s at the nearest SSS office. Household employers may enroll in the Auto-Debit Arrangement System which allows the one-time enrollment of the employer’s bank account for the automatic payment of monthly SSS contributions and loan repayments. This arrangement is open at the United Coconut Planters Bank, Equitable-PCI Bank, Bank of the Philippine Islands, Metropolitan Bank and Trust Co., Philippine National Bank; Asia Trust Bank; Philippine Savings Bank; Development Bank of the Philippines; and more bank soon.
   
6. remit to the SSS all salary, educational, stocks investment or privatization loan amortization of their employees and submit an accomplished SSS Form ML-1 (Monthly Salary/Calamity/Emergency/Stock Investment Loan Payment Return) to any of the SSS accredited banks within the first ten (10) calendar days following the month when said amortizations are due and applicable;
   
   
7. submit a summary of all employees’ loan amortization thru an accomplished SSS Form ML-2 (Collection List) with copies of the SBRs and SSS Form ML-1 on or before the tenth day following the applicable month to the nearest branch;
   
   An employer may also participate in the Salary Loan Repayment Tape/Diskette project which allows the submission of the monthly summary of employees’ loan repayment thru a computer tape or diskette. This system provides employers with convenience and hastens the posting of member’s loan repayments.
   
   
8. advance SS and EC sickness benefits due their employees once these are approved by the SSS;
   
   
9. advance SS maternity benefits due to qualified female employees;
   
   
10. file for reimbursement for all legally advanced sickness and maternity benefits;
    
    
11. keep their employees updated on the changes in SSS policies and increases in their benefits;
    
    
12. ensure that all forms submitted are properly and accurately accomplished;
    
    
13. inform SSS of any change in company address, business name or temporary/permanent cessation of business operations through the submission of a duly notarized SSS Form R-8 ( Employer Data Change Request);
    
    
14. submit annually an updated SSS Form L-501 (Specimen Signature Card); and,
    
    
15. certify SSS-related documents for the employees when required for purposes of their claims.
    
    

What are the duties and responsibilities of a voluntary/self-employed member?
Self-employed/voluntary members should:

1. pay their monthly contributions using SSS Form RS-5 (Contributions Payment Return Form) monthly in accordance with the prescribed schedule;
   
   Beginning 01 January 2004, self-employed and voluntary members, including OFWs may change their MSC monthly. The change may be by one or two salary brackets without requiring the submission of documents to prove their earnings. In case the change will result to an MSC of lower than P5, 000.00, or where the change will result to more than the present MSC, a Declaration of Earnings must be submitted to support the new earnings. However, if the age of the member is 55 years or older and the present MSC is more than P10, 000.00, the allowed increase is only one salary bracket regardless of whether the supporting documents are submitted or not.
   
   For Overseas Filipino Workers (OFWs), the minimum MSC was increased from P3, 000.00 to P5, 000.00, or beginning 01 January 2004
   
   
2. update or correct their personal records with the SSS by submitting a duly filled-up SSS Form E-4 (Member’s Data Amendment) with supporting documents.
   
   
3. be conscious of changes and improvements in SSS policies and benefit structure.
   
   Self-employed and voluntary members may enroll in the Auto-Debit Arrangement System which allows the one-time enrollment of the employer’s bank account for the automatic payment of monthly SSS contributions and loan repayments. This arrangement is open at the United Coconut Planters Bank, Equitable/PCI Bank, Bank of the Philippine Islands, Metropolitan Bank and Trust Co., Philippine National Bank, Asia Trust Bank, Philippine Savings Bank, Development Bank of the Philippines; and more banks soon.

SSS Sickness Benefits - Frequently Asked Questions

What is the sickness benefit?

The sickness benefit is a daily cash allowance paid for the number of days a member is unable to work due to sickness or injury.

How does an SSS member qualify for the sickness benefit?

A member is qualified to avail of this benefit if:

1. unable to work due to sickness or injury and confined either in a hospital or at home for at least four days;
2. at least three months of contributions within the 12 month period immediately before the semester of sickness has been paid;
3. all company sick leaves with pay for the current year has been used up;
4. the employer has been notified, or, if a separated, voluntary or self-employed member, the SSS directly.

How much sickness benefit is a member entitled to receive?

The amount of a member’s sickness benefit per day is equivalent to ninety percent (90%) of the member’s average daily salary credit.

How is the sickness benefit computed?

1. Exclude the semester of sickness.
   
       A semester refers to two consecutive quarters ending in the quarter of sickness.
       A quarter refers to three consecutive months ending March, June, September or December.
2. Count 12 months backwards starting from the month immediately before the semester of sickness.
3. Identify the six highest monthly salary credits within the 12-month period.
   Monthly salary credit means the compensation base for contributions and benefits related to the total earnings for the month. (The maximum covered earnings or compensation is P15,000 effective Jan 1, 2002).
   Please refer to the following table:

   Range of Compensation	Monthly Salary Credit
   1,000 - 1,249.99	1,000
   1,250 - 1,749.99	1,500
   1,750 - 2,249.99	2,000
   2,250 - 2,749.99	2,500
   2,750 - 3,249.99	3,000
   3,250 - 3,749.99	3,500
   3,750 - 4,249.99	4,000
   4,250 - 4,749.99	4,500
   4,750 - 5,249.99	5,000
   5,250 - 5,749.99	5,500
   5,750 - 6,249.99	6,000
   6,250 - 6,749.99	6,500
   6,750 - 7,249.99	7,000
   7,250 - 7,749.99	7,500
   7,750 - 8,249.99	8,000
   8,250 - 8,749.99	8,500
   8,750 - 9,249.99	9,000
   9,250 - 9,749.99	9,500
   9,750 - 10,249.99	10,000
   10,250 - 10,749.99	10,500
   10,750 - 11,249.99	11,000
   11,250 - 11,749.99	11,500
   11,750 - 12,249.99	12,000
   12,250 - 12,749.99	12,500
   12,750 - 13,249.99	13,000
   13,250 - 13,749.99	13,500
   13,750 - 14,249.99	14,000
   14,250 - 14,749.99	14,500
   14,750 - O V E R	15,000

   
   
   
4. Add the six highest monthly salary credits to get the total monthly salary credit.
5. Divide the total monthly salary credits by 180 days to get the average daily salary credit.
6. Multiply the average daily salary credit by 90 percent to get the daily sickness allowance.
7. Multiply the daily sickness allowance by approved number of days to arrive at the amount of benefit due.

For example, let us say that an SSS member gets sick or injured in October 2004 for 20 days:

1. The semester of sickness would be from July 2004 to December 2004.
2. The 12-month period would be from July 2003 to June 2004 within which the six highest monthly salary credits will be chosen.
3. Let us assume that the six highest monthly salary credits are P15, 000 each. The total monthly credit would be P90, 000 (P15, 000 x 6).
4. The total monthly salary would be divided by 180 to get the average daily salary credit or P500 (P90, 000/180).
5. The sickness benefit due is P9,000 (P450 x 20 days).

How many days in a year can a member avail himself of the sickness benefit?

A member can be granted sickness benefit for a maximum of 120 days in one calendar year. Any unused portion of the allowable 120 days sickness benefit cannot be carried forward and added to the total number of allowed compensable days for the following year.

The sickness benefit shall not be paid for more than 240 days on account of the same illness. If the sickness or injury still persists after 240 days, his claim will be considered a disability claim.

Who should an employee notify regarding his sickness or injury?

A member should notify the employer within five (5) calendar days after the start of sickness or injury. The employer, in turn, must notify the SSS of the confinement within (5) calendar days after receipt of the notification from the employee member.

Notification to the employer is not necessary if the member’s confinement is in a hospital or if the member got sick or was injured while working or was within the company premises. In this case, the employer must notify the SSS within five (5) calendar days from the start of the employee’s sickness or injury while working or was within the company premises.

What is the procedure for notification for unemployed, self-employed and voluntary members?

Unemployed, self-employed or voluntary paying members should notify the SSS directly within five (5) calendar days after the start of confinement, unless such confinement is in the hospital,in which case, notification is not necessary.

What are the effects of failure or delay in notification?

1. If the employee notifies the employer, or the SSS, in the case of an unemployed, self-employed or voluntary paying member, beyond the prescribed five-day period, the confinement shall be deemed to have started not earlier than the fifth day immediately preceding the date of notification.
2. If the employer notifies the SSS beyond the five (5) calendar days after the receipt of the notification from the employee, the employer shall be reimbursed only for each day of confinement starting from the 10th calendar day immediately preceding the date of notification to the SSS.
3. If the employee has given the required notification to the employer, but the employer fails to notify the SSS of the confinement within the prescribed period resulting in the reduction of the benefit or denial of the claim, the employer shall have no right to recover the daily sickness allowance advanced to the employee.

SSS Emergency Loan - Frequently Asked Questions

What is an EC emergency loan?

It is a loan granted to workers in the private sector who were separated from employment as a result of the currency crisis.

Who may qualify for an emergency loan?

1. A member who has been separated from employment not earlier than 01 July 1997 due to mass lay-off, or who has been temporarily separated or retrenched following the suspension of his firm's operation due to the currency crisis.
   
   A member who has not been laid off but whose income or wages have been effectively reduced due to job rotation or reduced working hours is also qualified.
   
   
2. He has paid and remitted at least six monthly contributions prior to the semester of separation or temporary lay-off from employment or depletion of income.
   
   
3. He has not yet been granted a refund of contributions, retirement or total permanent disability benefits.
   
   
4. He must be up-to-date in the payment of all member loan obligations, including the following, prior to his separation from employment:
   
   

   	salary loan
   	calamity loan
   	educational loan
   	emergency loan
   	stock investment loan
   	privatization fund loan
   	special educational loan for vocational and technical students
   	special educational loan for Y2K conversion training
   	member assistance for the development of entrepreneurship (MADE), and
   	housing loan granted through the SSS, National Home Mortgage Finance Corporation (NHMFC) and Home Development Mutual Fund (Pag-IBIG).

   
   
   
5. He has no outstanding balance on any previous emergency loan granted by the Employees' Compensation Commission (ECC).
   
   
6. He has not been disqualified by the Social Security Commission (SSC) for having filed a fraudulent loan application with the SSS.
   

How much is the loanable amount?

An emergency loan is equivalent to twice the member-borrower's latest monthly salary credit posted in the SSS master file, but not to exceed P12,500.

How much is the interest charged on an emergency loan?

An emergency loan is charged an interest of six per cent a year, deductible in advance.

What is meant by monthly salary credit?

The monthly salary credit is the basis of the computation of benefits and loans (Please see the schedule of contributions).

In case a loan is not paid, how much is the delinquency interest?

Any balance of the loan not paid on time will be charged an interest of one per cent a month until it is fully paid.

SSS Salary Loan - Frequently Asked Questions

What is a salary loan?

It is a loan intended to meet a member's short-termcredit needs.

Who may qualify for a salary loan?

1. An employed, currently paying self-employed or voluntary member (SE/VM) who has 6 posted monthly contributions for the last 12 months prior to the month of filing of application.
   • For one-month loan, the member-borrower must have 36 posted monthly contributions prior to the month of  filing of application.
   • For a two-month loan, the member-borrower must have 72 posted monthly contributions prior to the month of filing of application.
2. If the member-borrower is employed, the employer must be updated in contributions and loan remittances.
3. The member-borrower must be updated-current in the payment of other member loans, which include educational, stock investment, MADE & housing loans granted under the Unified Housing Loan program (UHLP) or direct from SSS.
4. The member-borrower has not been granted final benefit (total permanent disability, retirement and death).
5. The member-borrower has not been disqualified due to fraud committed against the SSS.

How much is the loanable amount?

A one-month salary loan is equivalent to the average of the member’s latest 12 monthly credits posted.

A two-month salary loan is equivalent to twice the average of the member’s latest 12 monthly salary credits posted (rounded to the next higher monthly salary credit), but not to exceed P24,000.

How long will it take the member to pay back the loan?

The one-month or two-month salary loan shall be payable within two (2) years in 24 equal monthly installments.

How much is the interest charged on a salary loan?

The loan shall be charged a nominal interest of 10% per annum. First year’s interest shall be deducted in advance from the proceeds of the loan. Second year’s interest shall be included in the monthly amortizations.

In case a loan is not paid, how much is the delinquency interest?

Loan amortization not remitted on due date shall bear a penalty of 1% per month.

Is there a service fee?

Yes. A service fee of 1% of the loan amount shall be charged and deducted from the proceeds of the loan.

When can a member renew a salary loan with the SSS?

The loan may be renewed after the prescribed amortization period of two (2) years. Balance of P500 or less shall be deducted from the proceeds of the new loan.

How does a member pay back the loan?

For employed member-borrower (including participants of the fast track program), the first deduction from their salaries shall start on the second month following the date of loan. All remittances shall be made on or before the 10th day following the applicable month of deduction to the SSS or to any of its authorized banks.

The employee is obliged to report to the new employer his obligations with SSS and shall allow the new employer to deduct from his salary the corresponding amortizations due, plus any penalty for late remittance of amortizations.

For self-employed or voluntary paying member-borrowers, the first amortization shall be paid to the SSS or any of its authorized banks on or before the 10th day of the third month following the date of loan.

What are the obligations of the employer to the SSS?

The employer shall be responsible for the collection and remittance to the SSS of the amortization(s) due on the member-borrower’s salary loan through payroll deduction.

The employer shall require new employees to secure from the SSS an updated statement of account.

The new employer shall continue the deduction and shall be accountable for remittance to the SSS.

In case of transfer, separation, or resignation, how can a borrower pay back the loan?

In case a member-borrower is separated voluntarily, (e.g. retirement or resignation) or involuntarily, (e.g. termination of employment or cessation of operations of the company), the employer shall be required to deduct the total balance of the loan from any benefit(s) due to the employee and shall remit the same in full to SSS.

If the benefit(s) due the employee or the amount thereof legally available for offset of obligations of the employee is insufficient to fully repay the loan, the employer shall report the unpaid loan balance to SSS.

In case of member-borrower’s death, total disability or retirement, what happens to the unpaid loan?

In case of member’s’s death, total disability or retirement under the Social Security Act, the entire amount or any unpaid amount of the loan as well as the interest and penalty thereon, If any,shall be deducted from the corresponding benefit.

What are the papers/documents needed for filing a salary loan?

An employed member shall submitan accomplished SSS Form ISL-101 (Member Loan Application Revised March 2004) and present the digitized SSS ID cards or E-6 acknowledgement stub with 2 (2) IDs listed below one of which with recent photo and date of birth.

A self-employed, voluntary member, overseas worker, non-working spouse, farmer or fisherfolk and house hold-helper shall submit an accomplished SSS Form ISL-101 and present the digitized ID card or E-6 acknowledgement stub with any two (2) of the following valid IDs,one of which with recent photo and date of birth.

•    Unexpired Driver’s License
•    Professional Regulation Commission (PRC) ID Card
•    Passport
•    Postal ID
•    School or Company ID
•    Tax Identification Number Card (TIN)

Where can a borrower file the salary loan application?

A borrower may file the salary loan application at the nearest SSS branch or representative office.

NOTE: The employer shall submit annually an updated SSS Form L-501 (Specimen Signature Card) to avoid delay in the processing of salary loan applications.