Is it worth to loan from the Social Fund?

Most employees are not aware of the existence of the Company Social Benefits Fund in their enterprise. It turns out, however, that the pool of employee funds can be used for various purposes, including loans to meet the housing needs of employed persons.

What is worth knowing about this topic? Who can use the company’s funds and on what terms?

What is worth knowing about this topic? Who can use the company

Interestingly, nowadays, these types of pools are gathered not only by obligated institutions from the public sector, but also by many private enterprises.

What is the social fund?

What is social fund?

The existence of this type of instrument is provided for in the Act on the Company Social Benefits Fund of March 4, 1994, which sets the basic framework for its functioning, as well as the goals it pursues.

Pursuant to the provisions of the legal act, the Fund is to be used, inter alia, to finance social activities organized for the benefit of people entitled to use it, as well as material support for social facilities that the employer has. In addition, children’s clubs, kindergartens and company crèches are to be created from the accumulated cash.

A loan from CSBF?

A loan from CSBF?

The Act allows collecting employee loans from the funds accumulated in the Fund. The regulations do not regulate the purpose for which the funds obtained from the company’s social pool can be allocated. In practice, decisions about granting benefits are made by the employer.

However, he should do it on the basis of the provisions in the Company’s Social Benefits Regulations. This document may regulate the nature of the loan (repayable or non-returnable), its repayment period, as well as refine the group of people and the set of conditions that must be met in order to be able to reach for an additional injection of cash.

Who can apply for a loan?

credit loan

The aforementioned Act does not specify the maximum amount of benefits granted. These regulations should clearly state who, when and on what terms they can apply for funds. Most often, this type of document stipulates that funds from the Social Fund may be lost only to employees who need them for housing purposes.

Speech, in particular, about the construction of a dwelling, refurbishment, adaptation or modernization of an already existing flat, purchase of real estate, its adaptation to the needs of the disabled or supplementing the contribution in a given housing cooperative.

What about the return of the benefit?

As already mentioned, we divide the loan into non-return and non-returnable. Its character is usually determined by the purpose for which the commitment is made. Most of the regulations of company social funds provide that non-repayable support may be intended, inter alia, to cover expenses related to the use of an apartment, i.e. electricity, gas costs or fuel purchase, in particular rent. For each of these expenses, the employee must have an invoice or bill.

Returns policy

The second type is a benefit which should be returned in a contractual period. Conditions for granting and repayment of such loans should be specified in the rules of the Social Fund. An employee who has received a refundable amount is required to give written permission to deduct a certain amount from remuneration, bonuses or rewards.

Importantly, the funds can also be taken from sickness benefit. Returns are granted mainly for renovation, reconstruction or modernization of a residential premises. Regulations do not allow the use of funds for the purchase of equipment such as a washing machine, fridge or TV.

What should the contract contain?

The role of the contract is to clarify the general rules resulting from the ABC regulations. The document should contain specific information on the loan amount, the repayment period, the number of installments and the purpose for which the funds must be allocated.

Each contract must contain provisions related to the form of transfer of money (cash or the indicated bank account number of the employee), as well as the possibility of exempting the employee from the obligation to return the loan in exceptional circumstances.

It is worth noting that only the employee who has the guarantor can reach for a loan from the Social Fund. What’s more, a worker must be a person employed in the same enterprise.

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