TO help cushion the impact of high inflation, the Department of Social Welfare and Development (DSWD) will double the monthly subsidy of indigent senior citizens from P500 to P1,000 beginning this February as part of its ongoing social pension program.
This developed as the Department of Justice (DOJ) justified the double accreditation requirement imposed on social welfare and development agencies (SWDAs) in order to be recognized as “donee institutions” by the Bureau of Internal Revenue.
DSWD spokesman Assistant Secretary for Strategic Communications Romel Lopez said they“ expect the distribution of the social pension for the first semester with its increased amount to start this coming February.
The DSWD said there are 4,085,066 indigent senior citizens who stand to benefit from the subsidy program.
Lopez said the funds for this program were already included in the DSWD budget this year per Republic Act 11916 or the Act Increasing the Social Pension of Indigent Senior Citizens, which lapsed into law in July 2022.
The monthly social pension for senior citizens is given to qualified beneficiaries on a semestral basis with a total amount of P6,000 per payout to augment their daily subsistence and other needs.
According to Lopez, the social pension program covers indigent elderlies who are frail, sickly, or have disability. They must also have no permanent source of income and receive no regular financial support from their family or relatives.
Also eligible under the program are those who are not receiving pensions from the Social Security System (SSS), the Government Service Insurance System (GSIS), the Philippine Veterans Affairs Office (PVAO), the Armed Forces and Police Mutual Benefit Association, Inc. (AFPMBAI), or any other private insurance company.
Meanwhile, in a legal opinion dated January 10, 2024, Justice Secretary Jesus Crispin Remulla said the DOJ recognized both the role of the Department of Social Welfare and Development (DSWD) and the Philippine Council for NGO Certification (PCNC) in regulating SWDAs.
The DOJ chief rendered the legal opinion in response to a letter of DSWD Secretary Rex Gatchalian seeking the DOJ’s guidance on whether the accreditation of social welfare institutions fall exclusively under the DSWD’s role and function, excluding other public and private entities.
Gatchalian’s request was prompted by several complaints received by the DSWD from SWDAs on the double accreditation requirement to be recognized by the BIR as “donee institutions,” specifically, the initial accreditation from the DSWD and the subsequent one from the PCNC.
The BIR recognition as donee institution is vital for SWDAs in claiming deduction from gross income and exemption from donor’s tax.
However, the SWDAs were complaining on the fees they were required to pay for accreditation which included P1,000 as processing fee paid to DSWD and from P10,000 to P90,000 application fee plus P2,000 to P10,000 annual membership fee paid to the PCNC.
The SWDAs complained that the huge fees could be allocated for causes supported by SWDAs.
The DSWD told the DOJ that its position on the issue that the accreditation of SWDAs is within its jurisdiction, pursuant to the provide is of the 1987 Administrative Code and Executive Order (E.O) No. 221 Series of 2003.
It pointed out that E.O. No. 720, Series of 2008, which designated the PCNC as an accrediting body for purposes of deductions from gross income under Section 34 ( H ) ( 1 ) of Republic Act 8424 (Tax Reform Act of 1997), did not mention social welfare institutions in the list of qualified entities for accreditation as donee institutions.
The DOJ stressed that the PCNC’s mandate was clearly outlined in Sections 1 and 2 of Executive Order No. 720.
It noted that as an accrediting entity it is aimed at assessing the eligibility of corporations, associations or NGOs for accreditation as donee institutions.
The PCNC’s accreditation, according to the DOJ, facilitates the deductability of charitable contributions as a business expense under Section 34 ( H ) ( 1 ) of Republic Act 8424.
Besides, the DOJ noted that PCNC’s role as an accrediting entity does not supersede the accreditation carried out by the government agency responsible for regulating such corporations, associations or NGOs.
“The foregoing considered, it is beyond question that the DSWD holds the authority to register, license and accredit individuals, agencies and organizations engaged in social welfare and development services,” the DOJ said.
“While PCNC also engages in accrediting these organizations, it serves the sole purpose of acknowledging them as donee institutions for tax-related matters, specifically enabling the deductibility of contributions or gifts made to them as accredited donee institutions in computing taxable income,” it added.
While the SWDAs may opt not to seek PCNC accreditation, the DOJ said they would have to bear the consequence of not being able to seek deductions for contributions or gifts made to them in the income computations.