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Claiming a guaranteed multi-annual loan Unified Scheme of Credit and Social Benefits
The guaranteed loan from the INPS is disbursed by financial enterprises and authorised credit institutes (article 15 of the Presidential Decree on. 180 of 5 January 1950) and cover the possible risks of:
- death of the member before the loan is extinguished;
- termination of the service without pension rights;
- reduction of the payment of the assignor.
Members enrolled in the Unified Scheme of Credit and Social Benefits may claim guaranteed loans, to be paid via monthly payment deductions up to one fifth of the monthly payment, net of withholding taxes.
Start date and duration
The loan can be taken out for five-years, to be repaid in 60 monthly instalments, or ten years, to be repaid in 120 monthly instalments.
Upon claim of the interested party, the guarantee can be revoked with the approval of the financial enterprise, before collection of the loan.
The amounts withheld by the administration from the payment must be paid to the financial institution by the 10th of the month following the reference month.
Unpaid payment shares generate interest for the assignee at the same loan agreement rate.
For the purpose of continuing the monthly withholding of the loan, if the obligor is employed by another administration, the office that operated the withdrawals will communicate the loan details to the new office, and the account of the deductions applied to the payment and the payments made to the Financial Institution. The communication must also be made to the INPS and to the assignee institution.
What am I entitled to?
The loan is calculated by multiplying the assignable portion (equivalent to the monthly instalment), by the number of monthly instalments corresponding to the duration of the loan.
The assignable portion cannot exceed one fifth of the payment, net of social security withholdings and other compensation subject to withholding (obligatory credit contribution, social security contributions and tax contributions).
The interest rate may be different according to the lending institution and the financial company to which it is addressed. Financial institutes must indicate clearly the APR (TAEG) (to be compared with the average rates of the decree published quarterly by the Ministry of the Economy and Finance in the Official Gazette, for this type of loan).
The gross amount of the concession is subject to:
- interest and administrative costs of the lending credit institutes;
- a 0.50% rate for the INPS administrative expenses;
- a compensatory premium to INPS for the risk of insolvency, of 1.5% for five-year loans and 3% for ten-year loans.
- the amount of the compensatory premium is increased respectively to 2% for the five-year loan and 4% for the ten-year loan if the duration of the loan expires after the applicant's 65th year of age.
The Credit fund assumes the following risks under the guarantee:
- in case of death of the assignor, it returns the residual debt to the assignee;
- in case of termination of service without pension rights, it redeems the loan, returns the remaining debt to the lender, and recovers the amount of the remaining shares on the Severance Indemnity or service;
- in case of payment reduction, it redeems the loan and returns the residual debt to the lending institution and recovers the sums paid on behalf of the assignor by means of a corresponding extension of the amortisation schedule at reduced instalments.
Early extinction of the loan can occur at any time with payment of the residual debt. The quota of the risk fund will be returned to the applicant (which can be claimed through the special reimbursement form) equal to the period of instalments not accrued following early extinction.
Terms of Renewal
A new loan cannot be claimed before one year from the voluntary extinction of the previous debt, nor can an ongoing loan be renewed before two years have elapsed since the beginning of a five-year assignment or four years from the beginning of a ten-year loan.
It is possible to apply for a ten-year loan with the same or another Financial Institution before two years have elapsed since the start of a five-year loan only if the interested party has never concluded different ten-year loans.
The new multi-annual loan guaranteed by the INPS extinguishes early the previous loan and the amortisation of the portion of the compensatory risk premium is made by offsetting the premium due on the new transaction.
The applicant must be employed under a permanent contract at the time of claim and with at least four years of actual service in the employment relationship with retired earnings (two if disabled, suffering from war injuries or decorated for military valor) and four years of contribution payment to the Credit Fund of the Unified Scheme of Credit and Social Benefits.
How can I claim?
The member must apply to the relevant administration using the form provided by the INPS (available under “Access the service”), attaching a medical certificate issued no later than 45 days before the claim is submitted by a doctor of the ASL (Local Health Authority) or by a military doctor in service or by a doctor appointed by the administration itself.
The claim, filled in by the relevant administration and complete with the supporting payment declaration, is forwarded to the lender institution.
After completing the contract proposal included in the form, the lender institute returns it to the relevant administration. The latter forwards it to the competent local INPS office, which verifies the accuracy of the acts before granting the guarantee.