HOME DEVELOPMENT MUTUAL FUND

1. Who are covered under the Home Development Mutual Fund Law?

Mandatory Coverage and Membership of Employees

Coverage under and membership in the Fund shall be mandatory for the
following:

All employees who are compulsorily covered by the SSS; Provided, that
for purposes of mandatory coverage in the Fund of persons who are
compulsorily covered by the SSS, the term employee shall be
understood the manner by which the SSS defines it, and shall include,
but not limited to:
A Private employee, whether permanent, temporary or
provisional, who is not over 60 years old.
A household-helper earning at least P1,000 a month. A
household-helper

is

any

person

who

renders

domestic

services exclusively to a household such as driver, gardener,

cook, governess, and other similar occupations.
A Filipino seafarer upon the signing of the standard contract of
employment between the seafarer and the manning agency
which, together with the foreign ship-owner, act as employers.
A self-employed person, regardless of trade, business or
occupation, with an income of at least P1,000 a month and
not over 60 years old. This includes, but not limited to; selfemployed professionals; business partners, single proprietors
and board directors; actors, actresses, directors, scriptwriters

and news reporters who are not under an employer-employee

relationship; professional athletes, coaches, trainers and
jockeys; farmers and fisher folks; and workers in the informal
sector such as cigarette vendors, watch-your-car boys, among
others. Provided, that a self-employed person subject to
compulsory coverage by the SSS shall be treated by the Fund
as both employee and employer at the same time, and shall
therefore be required to pay both the employee and the
corresponding employer contributions.
Provided finally, that actual membership in the SSS shall not be a
condition

precedent

for

mandatory

coverage

in

the

Fund,

it

being sufficient that the person ought to be covered compulsorily by

the SSS.

All employees who are subject to mandatory coverage by the GSIS,

regardless of their employment status.

Uniformed members of the Armed Forces of the Philippines, the Bureau
of Fire Protection, the Bureau of Jail Management and Penology, and

the Philippine National Police.

Filipinos employed by foreign-based employers. Coverage under the
Fund shall be mandatory for Filipinos employed by foreign-based
employers whether deployed here or abroad, or a combination thereof,
but whose respective employers are exclusively based outside of the
Philippines. The employers shall not be subject to mandatory coverage.
Provided, that if the employer maintains an office or agent in the
Philippines that effectively acts as an employer of the Filipino, then
such office or agent shall be deemed an employer subject of
mandatory coverage under R.A. 9679.

Mandatory Coverage of Employers

Coverage under the Fund shall be mandatory for the following:

Employers of employees compulsorily covered by the SSS. These shall

include private employers previously granted waiver or suspension of
coverage for whatever reason under Presidential Decree 1752, as
amended. Provided, that manning agencies together with the foreign
ship owners shall be considered jointly and severally as the employers
of Filipino Seafarers. Provided finally, that a self-employed person
subject to compulsory coverage by the SSS shall be treated by the

Fund as both employee and employer at the same time.

Employers of employees subject of mandatory coverage by the GSIS.
The Armed Forces of the Philippines, the Bureau of Fire Protection, the
Bureau of Jail Management and Penology, and the Philippine National
Police.

2. Who may qualify for voluntary coverage?

Persons who are at least eighteen (18) years old but not more than sixty
five (65) years old and are not subject to mandatory coverage may be
covered by the Fund on a voluntary basis, subject to such terms and
conditions stated in these Rules or as the Board may impose, and shall
include, but not limited to, the following:

Spouses who devote full time to managing the household and family
affairs, unless they also engage in another vocation or employment
which is subject to mandatory coverage.

Filipino employees of foreign government or international organization,

or their wholly-owned instrumentality based in the Philippines, in the
absence of an administrative agreement with the Fund.

Employees of an employer who is granted a waiver or suspension of

coverage by the Fund under R.A. 9679.

Leaders and members of religious groups;

A member separated from employment, local or abroad, or ceased to

be self-employed, but would like to continue paying his or her personal
contribution. Such member may be a pensioner, investor, or any other
individual with passive income or allowances.

Public officials or employees who are not covered by the GSIS, such as
Barangay Officials, including Barangay Chairmen, Barangay Council
Members,

Chairmen

of

Sangguniang

Kabataan,

and

Barangay

Secretaries and Treasurers.

Such other earning groups as may be determined by the Board by

rules and regulations.
Provided, that any foreign government, international organization or
their

wholly-owned

instrumentality

employing

workers

in

the

Philippines or employing Filipinos outside of the Philippines, may enter

into an agreement with the Fund for the inclusion of their employees as
members of the Fund; Provided, further, that the terms of such
agreement shall conform with the provisions of R.A. 9679 and these
Rules on coverage and amount of payment of contributions and
benefits; Provided, finally, that the provisions of the said Act shall be
supplementary to any such agreement.
3. What

is

the

effective

date

of

mandatory

and

voluntary

membership and coverage?

Mandatory coverage of the employer shall take effect on the first day of
his business operation, and that of the employee on the date of his or her
employment: Provided, that for:

Employees and employers who are not subject of mandatory coverage

prior to R.A. 9679 and these Rules, including the uniformed members

of the Armed Forces of the Philippines, the Bureau of Fire Protection,

the Bureau of Jail Management and Penology, and the Philippine
National Police, and their respective employers, as well as Filipinos
employed by foreign based employers, mandatory coverage shall take
effect on January 1, 2010, unless a different date is set by the Board by
resolution;

Employers whose coverage had been previously suspended or waived

for whatever reason under PD 1752, their coverage as well as that of
their employees shall take effect after the expiration of their respective
suspension or waiver of coverage;

Voluntary members, coverage shall commence on the actual date of

registration.

4. When does actual membership in the fund commence?

Actual membership in the Fund shall commence only upon remittance of
the initial contribution and not at point of registration.
5. Is actual membership in the SSS considered a condition precedent
for mandatory
No, actual membership in the SSS shall not be a condition precedent for
mandatory coverage in the Fund, it being sufficient that the person ought
to be covered compulsorily by the SSS.
6. When is the employer required to register?
All new employers shall first register with the Fund prior to the start of
their business operations..
7. When is the employee required to register?

For newly hired employees, the employer shall register them with the
Fund within thirty (30) days from the start of their employment.
.
8. Whose duty is it to register the employee under the fund?
It shall be the duty of all employers to register all their employees subject
of mandatory coverage, by submitting to the Fund all data and
information that it may require in relation to the employers respective
businesses and employees, within thirty (30) days from the start of their
business operations.
9. What is the term of membership?
Membership in the Fund shall be for a period of twenty (20) years
commencing from the first day of the month to which the members initial
contribution to the Fund applies; Provided, that the member shall have
contributed a total of two hundred forty (240) monthly contributions at
the time of maturity.
10.

What are the grounds for termination of membership?

Membership in the Fund shall be terminated anytime upon the occurrence

of any of the following; provided that the members financial obligations
with the Fund are first fully settled:

Membership Term Maturity;

Death;

Retirement;

Permanent Total Disability or Insanity;

Permanent departure from the country;

Termination from the service by reason of health;

Other causes as may be provided for by the Board of Trustees

11.

Is resignation, lay-off or suspension from employment a

ground for termination of membership? Discuss briefly.

No, resignation, lay-off or suspension from employment, shall not
constitute a ground for termination of membership. Such occurrences
shall only result to suspension of contributions.
12.

What is the compulsory age of retirement?

Any member shall be compulsorily retired under the Fund upon reaching
age sixty-five (65).

13.

May a member who has not reached the compulsory age of

retirement retire?
Yes, the member may opt to retire earlier under the Fund upon the
occurrence of any of the following events, provided the member is not a
member-borrower:

Actual retirement from the SSS or GSIS, or from government service by

provision of law;

Retirement under a separate employer provident or retirement plan.

Provided, that the member is at least forty-five (45) years of age at the
time of retirement;

Upon reaching age sixty (60).

Provided finally, that in the event the member opts to retire earlier from
the Fund for reasons stated under items b and c above, and thereafter
continues or subsequently places him or herself in a situation which would

subject him or herself to mandatory coverage, then the member shall

continue to be mandatorily covered by the Fund and his or her employer
is mandated to continue deducting and remitting the employees required
contribution together with the corresponding employers contribution
pursuant to these Rules.

14. What is the effect of leave without pay or suspension from

employment?
In the event a member-saver goes on leave without pay or is subjected to
disciplinary action where he is suspended from work, the member-savers
monthly contribution together with the corresponding employers monthly
contributions shall be suspended for the duration of the leave without pay
or suspension from work. Provided, that such member-saver may opt to
continue paying and remitting to the Fund directly his or her monthly
contributions together with the employer counterpart to be shouldered by
him or her. A member-borrower, on the other hand, shall continue to pay
and remit directly to the Fund his or her monthly contributions and loan
amortizations or payments. The duty of the employer to deduct monthly
amortizations or payments for the member-borrowers outstanding loan
with the Fund as provided for under Section 2 of this Rule shall be
suspended for the duration of the leave without pay or suspension from
work. Provided, that it shall be the duty of the employer to inform the
Fund of the members leave without pay or suspension from work within
thirty (30) days from the first day of such leave or suspension.
15.

What

is

the

effect

of

resignation

or

separation

from

employment?
In the event a member-saver resigns or is otherwise separated from
employment, the member-savers monthly contribution together with the

corresponding employers monthly contributions to the Fund shall cease.

Provided, that such member-saver may opt to continue paying and
remitting to the Fund directly his or her monthly contributions together
with the employer counterpart to be shouldered by him or her. A memberborrower, on the other hand, shall continue to pay and remit directly to
the Fund his or her monthly contributions and loan amortizations or
payments. The duty of the employer to deduct monthly amortizations or
payments for the member-borrowers outstanding loan with the Fund as
provided for under Section 2 of this Rule shall likewise cease. Provided,
that it shall be the duty of the employer to inform the Fund of such
resignation or separation immediately upon notice thereof, but not later
than thirty (30) days from the effectivity of said resignation or separation.
16.

May fund coverage be waived or suspended? Discuss.

Yes, the Board may, by rules or resolution, waive or suspend an

employers mandatory coverage under the Fund by reason of nature of
employment, condition of business, ability to make contributions and
other reasonable considerations.
17.

Are PAG-IBIG contributions included in the computation of the

members gross income? Discuss.

No, pursuant to Section 32 (B) (7) (f) of the National Internal Revenue
Code of 1997, as amended, Pag-IBIG Contributions are excluded from the
computation of the gross income and shall be exempt from taxation.
18.

What are the services or benefits that the members are

entitled to under the GSIS HDMF? Discuss each briefly.

Exemption from Tax, Legal Process and Lien. All laws to the contrary
notwithstanding, all contributions collected and all accruals thereto and

income or investment earnings therefrom, shall be exempt from any tax,

assessment, fee, charge, or customs or import duty; and all benefit
payments made by the Fund shall likewise be exempt from all kinds of
taxes, fees or charges, and shall not be liable to attachments,
garnishments, levy or seizure by or under any legal or equitable process
whatsoever, either before or after receipt by the person or persons
entitled thereto, except to pay any debt of the member to the Fund.
Dividends, The Board shall set aside annually an amount which in no case
shall be less than seventy percent (70%) of the annual net income of the
Fund, to be paid in the form of dividends to members. The members
contributions, inclusive of employees and employers contributions, shall
earn dividends which shall be distributed annually and credited to his or
her TAV. Only members with outstanding TAV as of year-end shall be
entitled to dividends declared for that particular year. All dividend
earnings shall be tax-free.
Housing Features. A member of good standing shall be eligible to apply
for housing loans, under such terms and conditions as may be authorized
by the Board, taking into account ability to pay. The Board of Trustees
shall institute policies to ensure that lower-income members obtain such
housing loans.
Benefit Programs. A member may avail of the Funds various short term
loans and other benefit programs, provided that he or she satisfies the
eligibility requirements set by the Board.
Optional Withdrawal of Contributions. Those who become members of the
Fund after the effectivity of R.A. 9679 shall have the option to withdraw
his or her Total Accumulated Value on the fifteenth (15th) year of

continuous membership. Provided, that said member has no outstanding

housing loan with the Fund at the time of withdrawal.
The exercise of this option by the member shall not be considered as a
ground to terminate his membership with the Fund. The member shall
continue to be mandatorily covered by the Fund and his or her employer
is mandated to continue deducting and remitting the employees required
contribution together with the corresponding employers contribution
pursuant to these Rules.
Death Benefits. Upon the death of a member, his or her beneficiaries shall
be entitled to death benefits in an amount to be determined by the Board
in addition to the Total Accumulated Value as mentioned provided for
under in Section 5 hereof.
19.

How can the members avail of these services of benefits?

A member may avail of the Funds various short term loans and other
benefit programs, provided that he or she satisfies the eligibility
requirements set by the Board.
20.

Who has jurisdiction over adjudication and settlement of

claims or disputes arising from violation of RA 9679 or other

related laws?
The Fund shall have original and exclusive jurisdiction overall claims and
disputes on any matter relative to the implementation of the provisions of
R.A. 9679 and these Rules affecting the rights and interest of the
members. The decision of the Chief Executive Officer of the Fund shall be
final and executory, unless appealed to the Board, after the lapse of thirty
(30) days from receipt by the aggrieved party of such decision. The
decision of the Board shall, unless appealed to a competent court,

become final and executory after fifteen (15) days from receipt of such
decision.
The Chief Executive Officer shall prescribe the forms to be used and the
procedures to be followed in the adjudication and settlement of the
aforementioned claims and disputes.