Republic Act No. 10963, the Tax Restructure for Acceleration and Inclusion (TRAIN) Law, is the centerpiece of a government-wide effort to reform the tax system to boost investment, employment, and poverty reduction. Property rights are safeguarded, competition is fostered, laws are streamlined, and food security is addressed while supporting the tax, customs administration, budget, and economic changes.
Also Read: All You Need to Know About DSWD’s Centenarian Program
The first proposed tax reform package includes cuts to individual income tax rates, estate and donor tax rates, and a VAT base expansion by deleting 80 lines of exemptions that have no basis or whose benefits may be delivered by targeted measures. Sugar-sweetened beverage taxes, oil product duties, and auto excises would help.
Specifically, TRAIN requires the government to undertake social mitigating measures to protect and improve the lives of the poor and vulnerable in the face of price increases, notably those caused by the rise in the excise on oil goods.
What is the DSWD Tax Reform Project Unconditional Cash Transfer Program?
The DSWD Unconditional Cash Transfer Program is the most extensive tax relief initiative created by the TRAIN Law (UCT). In theory, reduced income tax rates will benefit low-income families and those who stand to lose out from price increases in practice.
Benefits
The UCT/TRCT Program gives a one-time, fully unconditional grant of P2,400.00, or Two Hundred Pesos (P200.00) per month, for the first year of implementation, and P3,600, or Three Hundred Pesos (P300.00) per month, for the subsequent years of implementation.
Qualifications
A countrywide rollout of the UCT is required. All of the following people are qualified to be UCT recipients:
- Participating households in the Philippine government’s Pantawid Pamilyang Pilipino Program (4Ps Households),
- Recipients of Social Pension payments under the Senior Citizens Act (Republic Act 7432) and its amendments (Republic Acts 9257 and 9994) (Social Pension Beneficiaries), and
- Additional low-income households in the NHTS-PR database provided that they are in the top seven deciles of the system’s income distribution projections (NHTS-PR Households).
A Condition Is That:
- The DSWD determines aid recipients at the start of each year. Unexpected events after nomination will not influence a recipient’s UCT Cash Grant for the year (e.g., the demise of a Beneficiary before the payout date)
- 4Ps include Households receiving 4Ps Modified Conditional Cash Transfer funding (MCCT).
- 4Ps “Household” may also refer to households that were eligible for the 4Ps program but were withdrawn owing to program criteria (and not due to any fraudulent activity).
- If funds are available, UCT beneficiaries will be selected from the NHTS-PR database, with priority given to the poorest households, although only those in the first through seventh deciles will be eligible.
Social Pension Beneficiaries can get their I-JCT Cash Grant whether they live in a 4Ps or NHTS-PR Household.
Procedure
A. The Process Of Identifying And Determining Recipients
- The 4Ps National Program Management Office will list UCT beneficiaries from 4Ps Households (4Ps NPMO).
- The PSB will list I-JCT and Social Pension Recipients.
- The National Household Targeting Office will identify I-JCT-eligible NHTS households (NHTO). NHTO verifies NHTS families receiving UCT subsidies.
- Later guidelines will enlist households with NHTO-verified beneficiaries.
- The I-JCT NPMO organizes the 4Ps, PSB, and NHTO listings. During UCT’s first year, this must be done immediately. Before the second UCT implementation, this must be done by November 30.
B. Distribution Of Recipients List
- The UCT NPMO is responsible for providing the Land Bank of the Philippines with the finalized List of UCT Beneficiaries (LBP).
- Before the final list is finalized, the UCT NPMO may submit interim lists of I-JCT recipients to LBP for consideration.
C. Disbursement And Disbursal Of I-JCT Cash Grants
To those on the DSWD’s List of I-JCT Beneficiaries, the LBP must disperse and pay UCT Cash Grants.
The I-BP may use any combination of the following Modes for the distribution and payment of UCT Cash Grants:
- Cash Card from LBP
- Cash Cards from Other Accredited Financial Institutions
- I-BP OTC
- I-BP Conduits like Rural Banks and Credit Unions (e.g., rural banks, cooperative banks, and thrift banks), Cooperatives, Telecommunications Firms, Section (TELCOs), Financial Institutions That Facilitate International Money Transfers, I-BP ATMs operated by several Rural Financial Institutions, Other Potentially Useful Conduits, Subject to DSWD and LBP Agreement
When available, utilize the LBP Cash Card. I-BP will give as many I-JCT Beneficiaries I-BP Cash Cards in the UCT’s second and subsequent years. DSWD pays for I-BP Cash Cards.
I-BP may deduct appropriate costs for its services from I-JCT monies provided to LBP in the first year of implementation and subsequent years. In UCT-appropriated years, the DSWD and I-BP will agree on these fees.
The DSWD must help I-BP implement the Modes.
DSWD and I-BP-approved Operating Procedures will govern each Mode.
D. Reports
- The I-BP is obligated to report quarterly to the DSWD on the number of UCT Cash Grants given out to I-JCT Beneficiaries via each available Mode.
- As often as is needed by law, the DSWD must report on the status of the UCT’s implementation to regulatory bodies.
E. Grievances
It is the responsibility of the I-JCT NPMO to investigate and address any complaints related to the implementation of the I-JCT in line with the policies and procedures it establishes for this purpose.
Video: DSWD Unconditional Cash Transfer
Here’s the video about the program.
The video shows the Department of Social Welfare and Development (DSWD) launching the Unconditional Cash Transfer Social Pension (UCT-SOCPEN) distribution program in Silang, Cavite on June 30, 2018.
Cash assistance is available to low-income Filipinos through the DSWD’s UCT-SOCPEN program. Its goal is to mitigate the impact of the TRAIN Law’s tax increases on necessities purchased by low-income families.
Frequently Asked Questions
What Is UCT?
UCT Means Unconditional Cash Transfer.
The goal of the UCT program is to safeguard the most disadvantaged members of society by providing them with access to social services free of strings attached.
The TRAIN law provides cash subsidies to low-income Filipinos through the Universal Credit for the Poor (UCT).
What Is The Legal Basis Of UCT?
TRAIN Section 82 R.A. No. 10963 Incremental Revenues. The following annual incremental revenues will be automatically appropriated for five years after this Act takes effect:
For three years following the enactment of this law, households in the first to seventh income deciles will receive an Unconditional Cash Transfer of at most 30% of their monthly benefit from the Pantawid Pamilyang Pilipino Program, National Household Targeting System for Poverty Reduction (NHTS-PR), and the Social Pension Program. The Department of Social Welfare and Development should implement a monthly unconditional cash transfer of Two Hundred Pesos (200.00) for the first year and Three Hundred (300.00) for the second and third years (DSWD)
The Land Bank of the Philippines and DSWD will issue instructions for implementing this provision (LBP).
Joint Memorandum 2018-001.
The DOF, DBM, and DSWD’s Joint Memorandum Circular 2018-001 state that the UCT and TRCT must be considered the same program. These Rules call the Program “UCT/TRCT.”
Who Are The Beneficiaries?
A countrywide rollout of the UCT is required. UCT Beneficiaries shall include the following:
- Participating households in the Philippine government’s Pantawid Pamilyang Pilipino Program (4Ps Households),
- Recipients of Social Pension payments under the Senior Citizens Act (Republic Act 7432) and its amendments (Republic Acts 9257 and 9994) (Social Pension Beneficiaries), and
- Additional low-income households in the NHTS-PR database provided that they are in the top seven deciles of the system’s income distribution projections (NHTS-PR Households).
How Much Will The Beneficiaries Will Received?
Cash awards are provided to eligible beneficiaries by UCT, with the first year’s allocation set at Two Hundred Pesos (PHP 200.00) per month and subsequent allocations set at Three Hundred Pesos (PHP 300.00) per month.
How Much Is The Allocated Fund For This Project?
The Department of Budget and Management (DBM) has transferred PhP 24.5 billion to the Land Bank of the Philippines (LBP) through the Tax Reform Cash Transfer Project (TRCT) of the Department of Social Welfare and Development (DSWD). The Tax Reform for Acceleration and Inclusion (TRAIN) Act is the biggest tax reform mitigation initiative.
Summary
The UCT is a much-needed social safety net for the poorest Filipinos. We hope this article has helped you understand the program and how it can benefit you and your family. For more information, please visit the official website of the Department of Social Welfare and Development (DSWD). Thank you for reading!