General Appropriations Act : Legislated Issuances On Authorized Deductions

Have you, as a Philippine government employee, tried to take out a loan from your office’ cooperative, mutual fund, HDMF (the administrator of the Pag-ibig housig funds) and the GSIS (government pension fund office), only to be declined?  This is due to a provision in the General Appropriations Act (GAA) stating that when an employees’ net take home pay is less than P5,000, they could no longer loan from these funding entities.  Section 37 entitled “Authorized Deductions” of the GAA of 2012.  The 2012 GAA which was enacted through Republic Act No. 10155 authorizes deductions from   a government employee’s salary, as long as their total deductions shall not go below P5000.

Prior to 2012, an employee’s net take home pay should not go below P3,000.  This has been stated in Sections 36 and 41 of the GAA of 2002 and 2008, respectively.   The GAA OF 2002 and 2008 was enacted through Republic Act Nos. 9162 and 9498, respectively. 

Below are the provisions of the GAAs relative to Authorized Deductions:

General Provisions on Authorized Deductions in the General Appropriations Act (GAA)

General Appropriations Act, 2002 (REPUBLIC ACT NO. 9162)

Section 36. Authorized Deductions. – Deductions from salaries, emoluments or other benefits accruing to any government employee chargeable against the personal services appropriation authorized in this Act may be allowed for the payment of obligations due the GSIS, HDMF, PHIC and other Government Financial Institutions, the Bureau of Internal Revenue and those specifically allowed by existing laws: Provided, That the agencies and offices with existing deductions arrangements with private lenders and cooperatives shall continue such deductions until the credits/loans outstanding or the premiums of the policies in force at the date of passage of this Act or, December 31, 2001 whichever comes later, shall have been fully paid: Provided, further, That such deductions shall not reduce the employee’s monthly net take home pay to an amount lower than Three Thousand Pesos (P3,000.00), after all authorized deductions. It shall be unlawful for departments, bureaus, offices and agencies to collect any form of service fees for the payment of any obligation through authorized deductions.

General Appropriations Act,  2008 (REPUBLIC ACT NO. 9498)

Section 41.  Authorized Deductions …“deductions from salaries, emoluments or other benefits accruing to any government employee chargeable against the appropriations for personal services may be allowed for the payment of individual employee’s contributions or obligations due the following:      a. The BIR, GSIS, HDMF and PHIC;b. Mutual benefits associations duly operating under existing laws which are managed by, and for the benefit of, government employees not covered by compulsory membership in the GSIS; and c. Associations / cooperatives organized and managed by government employees for their benefit and welfare.      PROVIDED, That such deductions shall not reduce the employee’s monthly net take home pay to an amount lower than Three Thousand Pesos (P3,000.00), after all authorized deductions: PROVIDED FURTHER, That in the event total authorized deductions shall reduce net take home pay to less than Three Thousand Pesos (P3,000.00), authorized deductions under item (a) shall enjoy first preference, those under item (b) second preference, and so forth.”        

GENERAL APPROPRIATIONS ACT 2012  (REPUBLIC ACT NO. 10155)

       Section 37. Authorized Deductions.  Deductions from salaries, emoluments or other benefits accruing to any government employee chargeable against appropriations for Personal Services may be allowed for the payment of individual employee’s contributions or obligations due the following:

(a)  The BIR, Philhealth, GSIS, and HDMF;

(b) Mutual benefits associations, thrift banks and non-stock savings and loan associations duly operating under existing laws which are managed by and/or  for the benefit of government employees;

(c)  Associations/cooperatives/provident funds organized and managed by government employees for their benefit and welfare; and

(d) Duly licensed insurance companies accredited by national government agencies.

PROVIDED, That such deductions shall not reduce the employee’s monthly net take home pay to an amount lower than Five thousand Pesos (P5,000), after all authorized deductions: PROVIDED FURTHER, That in the event total authorized deductions shall reduce net take home pay to less than Five Thousand Pesos (P5,000), authorized deductions under item (a) shall enjoy first preference, those under item (b) shall enjoy second preference, and so forth.

Source:

Philippine Laws

1.     Republic  Act No. 9162 (General Appropriations Act 2002)

        (No Official Gazette Source)

2.     Republic  Act No. 9498 (General Appropriations Act 2008)

(Official Gazette Hard Copy Only)

         Official Gazette volume 104, no. 1

         (Issue Date: March 16, 2008)

3.     Republic Act No. 10155 (General Appropriations Act 2012)

 

http://www.gov.ph/2012/01/01/republic-act-no-10155/

3 Comments

Filed under Authorization of Deductions, Authorized Deductions, General Appropriations Acts

3 responses to “General Appropriations Act : Legislated Issuances On Authorized Deductions

  1. Albert

    How about the employee in Salary Grade 1, Step 1, in third class Municipality

    • I believe what you are looking for are the salary grade level and corresponding salaries in the Salary Standardization Law as per Congress Joint Resolution No. 4, and approved on June 17, 2009. It took effect January 2010 and its full implementation is on 2012. The implementing agencies are the Department of Budget and Management and the Civil Service Commission. Under the law, salary grade 1, step 1 should be at P9000, Step 2 at P9090, Step 3 at P9181, Step 4 at P9273, Step 5 at P9365, Step 6 at P9459, Step 7 at P9554 and the last which is Step 8 at P9649.
      The full implementation of your salary under the law by 2012 should be at P9649. Sometimes and most of the time, this is not given on time due to budgetary constraints by the local government. If ever it is delayed, they should pay the employee the back wages equal to P9649 per month which is the last step under your salary grade. I will feature the rates in my next blog.
      Hope this answers your question.
      The Hrep Reference Librarian

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