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MC-005-2018 - Ed GSIS Clearance

This memorandum reminds government agencies to secure clearance from GSIS before paying terminal leave benefits to separating employees. It discusses the legal basis for deducting outstanding GSIS loan balances and premium arrearages from terminal leave benefits. Specifically, it cites Republic Act 1616 which established that the last employer is responsible for paying terminal benefits including unused leave, and thus must coordinate with GSIS which has contribution and loan records, to determine if any loan obligations exist that should be deducted before payment. The memorandum reinforces the long-standing practice of requiring GSIS clearance and deducting loan balances from terminal leave benefits.

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Beverly Mananguite
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468 views3 pages

MC-005-2018 - Ed GSIS Clearance

This memorandum reminds government agencies to secure clearance from GSIS before paying terminal leave benefits to separating employees. It discusses the legal basis for deducting outstanding GSIS loan balances and premium arrearages from terminal leave benefits. Specifically, it cites Republic Act 1616 which established that the last employer is responsible for paying terminal benefits including unused leave, and thus must coordinate with GSIS which has contribution and loan records, to determine if any loan obligations exist that should be deducted before payment. The memorandum reinforces the long-standing practice of requiring GSIS clearance and deducting loan balances from terminal leave benefits.

Uploaded by

Beverly Mananguite
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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C I C G o v e rn m e n t S ervice Insu ran ce System

V J I Financial Center, Pasay City, Metro Manila 1308

GSIS Memorandum Circular No. 005' Series of 2018

To: HEADS OF CONSTITUTIONAL BODIES; BUREAUS AND


AGENCIES OF THE NATIONAL GOVERNMENT; LOCAL
GOVERNMENT UNITS; GOVERNMENT OWNED OR CONTROLLED
CORP.; STATE UNIVERSITIES AND COLLEGES; AND ALL
OTHERS CONCERNED

Subject: RE-ISSUANCE OF GSIS MEMORANDUM CIRCULAR NO. 003,


SERIES OF 2015 (MEMORANDUM CIRCULAR-REMINDER TO
AGENCIES ON SECURING CLEARANCE FROM THE GSIS FOR
SEPARATING EMPLOYEES BEFORE PAYMENT OF THEIR
TERMINAL LEAVE)

The GSIS would like to remind and inform all government agencies and
instrumentalities the basis for requiring the issuance of a GSIS clearance before
payment of the terminal leave benefits as well as the legal basis for deducting GSIS
premium arrearages and loan balances therefrom.

The deduction of an employee-member’s outstanding GSIS loan balances or


obligations from the terminal leave benefits of the employee has been a long standing
practice observed by government agencies in their transactions with the GSIS.

The practice of requiring a GSIS Clearance from a retiring or resigning/separating


employee prior to the payment of the terminal leave benefit and the deduction of GSIS
loan balances therefrom finds support in the following:

A. Practice of securing a clearance from the GSIS

1. Republic Act No. 1616 (An Act Further Amending Section Twelve of
Commonwealth Act No. 186, as amended, By Prescribing Two Other
Modes of Retirement and for Other Purposes)

- Prior to RA 8291: The gratuity of an eligible retiree is paid by the last


employer and includes the commutation of the unused vacation and
sick leave which he may have to his credit at the time of retirement.
Since the last employer agency is obliged to pay the gratuity, there
is a corresponding duty on the part of the agency to coordinate with
the GSIS for the purpose of determining the existence of any loan
obligations with the GSIS, Prior to the payment of the gratuity under
R.A. No. 1616, clearance from the GSIS, which has the
contribution/loan records and which then computes the gratuity
benefits and loan balances, was first secured;

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