THE SOCIAL SECURITY (USE OF MEMBERS BENEFIT ENTITLEMENTS AS COLLATERAL FOR HOME MORTGAGE) REGULATIONS, 2024
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- THE SOCIAL SECURITY (USE OF MEMBERS BENEFIT ENTITLEMENTS AS COLLATERAL FOR HOME MORTGAGE) REGULATIONS, 2024
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About this statute
This section gives the short title of the regulations. This section defines key terms used in the Regulations, including Board, Division, Fund, contributions, member, eligible member, operational manual, home mortgage, Act, and institution. A member may use part of their Fund benefits as collateral for a home mortgage for housing purposes, and the Fund may handle only one collateral per eligible member at a time. This section limits how much benefit entitlement or property value may be counted as collateral for a home mortgage. A member may be entitled to access collateral under the Fund if the member is a Tanzanian citizen, is an eligible member, and the collateral’s validity does not go beyond the member’s compulsory retirement age.
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Provisions of THE SOCIAL SECURITY (USE OF MEMBERS BENEFIT ENTITLEMENTS AS COLLATERAL FOR HOME MORTGAGE) REGULATIONS, 2024
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Citation
AI-assisted research summary: This section gives the short title of the regulations.
1. These Regulations may be cited as the Social Security Schemes (Use of Member’s Benefit Entitlements as Collateral for Home Mortgage) Regulations, 2024. Interpretat ion - 2 Verify source ↗
Interpretation
AI-assisted research summary: This section defines key terms used in the Regulations, including Board, Division, Fund, contributions, member, eligible member, operational manual, home mortgage, Act, and institution.
2. In these Regulations, unless the context otherwise requires- “Board” means the Board of Trustees of the Fund; “Division” means the Division responsible for social security within the Ministry responsible for social security matters; “Fund” has the meaning ascribed to it under the respective scheme’s law; “contributions” means contributions payable to the Fund as prescribed in the schemes laws; “member” means an employee or worker registered by a scheme and includes a person entitled to or receiving a benefit under a scheme; “eligible member” means a member who has made at least one hundred and eighty months contributions of which twelve monthly contributions are made prior to the date of issuance of a collateral; “operational manual” means the internal document of the Fund containing operational processing and granting of collateral of a mortgage under these Regulations; “home mortgage” means a loan granted to an eligible member 3 Social Security (Use of Members Benefit Entitlements as Collateral for Home Mortgage) GN. NO.141 (Contd.) for the purposes of acquiring, constructing or improving a residential house which have been secured by the said house as the first collateral; Cap. 135 “Act” means the Social Security Act; and Cap. 342 “institution” means banks and financial institutions registered the Banking and Financial licensed under and Institutions Act. PART II THE COLLATERAL Assignment of benefits as collateral
Part
PART II
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Assignment of benefits as collateral
AI-assisted research summary: A member may use part of their Fund benefits as collateral for a home mortgage for housing purposes, and the Fund may handle only one collateral per eligible member at a time.
3.-(1) A member may assign a proportion of his benefit entitlements from the Fund to be used as a collateral for home mortgage granted or to be granted by the institution, to enable the member to- (a) construct a residential house on immovable property in respect of which he obtained ownership; (b) purchase a residential house; (c) improve, alter or carry out repairs to his house. (2) The Fund shall not issue more than one collateral at a time in respect of an eligible member. (3) The furnishing of the collateral shall be considered by the Fund upon formal application by a member, in the manner prescribed in the Fund’s operational manual. (4) The Fund shall review the member’s application for eligibility and notify the decision to the member accordingly. - 4 Verify source ↗
Proportion of assignable benefits
AI-assisted research summary: This section limits how much benefit entitlement or property value may be counted as collateral for a home mortgage.
4.-(1) The portion available to a member as a collateral for the home mortgage shall be- (a) an amount not exceeding fifty percent of the benefit entitlement to an eligible member at the time of the application; or (b) the purchase price of the property which shall not exceed the market value of the property, whichever is less. 4 Proportion of assignable benefits Social Security (Use of Members Benefit Entitlements as Collateral for Home Mortgage) GN. NO.141 (Contd.) (2) Where a transaction for the purchase of immovable property has not been finalised and a purchase price has been agreed upon by the parties, the value of the property shall not be fixed at an amount higher than the purchase price declared by the parties for the purposes of stamp duty. (3) Where a transaction for a mortgage is for improving, altering or repairing a residential house, the estimate of the fair market value of the immovable property shall not be fixed at an amount higher than an amount equal to the cost of such improvement, alterations or repairs. PART III CONDITIONS OF THE COLLATERAL Conditions for collateral to members
Part
PART III
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Conditions for collateral to members
AI-assisted research summary: A member may be entitled to access collateral under the Fund if the member is a Tanzanian citizen, is an eligible member, and the collateral’s validity does not go beyond the member’s compulsory retirement age.
5. A member may be entitled to access the collateral under the Fund if he satisfies the following conditions: (a) he is a Tanzanian citizen; (b) he is an eligible member; (c) the validity of the collateral shall not go beyond the member’s compulsory retirement age. Conditions for collateral to institutions - 6 Verify source ↗
Conditions for collateral to institutions
AI-assisted research summary: An institution that wants the Fund to provide collateral for a member’s loan must get Division approval and meet control, recordkeeping, and reporting requirements.
6. An institution that requires the Fund to furnish the collateral for member’s loan shall- (a) obtain approval from the Division; (b) have an adequate operational and internal control system for the purposes of structuring and operating a loan; (c) keep and update an accurate record of the transactions from and to a member’s loan account; and (d) generate reports as may be required by the Fund. Application for approval - 7 Verify source ↗
Application for approval
AI-assisted research summary: An institution must apply in writing to the Division for approval before providing a loan under these Regulations.
7.-(1) An institution intending to provide a loan under these Regulations shall apply in writing for approval from the Division. (2) An application under subregulation (1) shall be 5 Social Security (Use of Members Benefit Entitlements as Collateral for Home Mortgage) GN. NO.141 (Contd.) accompanied by the following documents: (a) a copy of incorporation documents; company’s registration or (b) documents relating to operational activities of the institution; (c) a copy of certificate of registration from the Bank of Tanzania; (d) a copy of valid business licence; (e) current audited financial statement; (f) details relating to the professional and academic qualifications of the Board of Directors and top management of the applicant; (g) a statement on the experience of the applicant in the provision of products and services relating to collateral for home mortgage; and (h) any other authorisation from relevant authorities as may be required subject to these Regulations. (3) The Division shall, within thirty days from the date of receipt of an application for approval, consider the application and issue a written approval to the applicant and shall, where it refuses the application, notify the applicant in writing stating the reasons for such refusal. - 8 Verify source ↗
Requirements for furnishing mortgages
AI-assisted research summary: The Fund must make an agreement with the institution about how mortgages are to be provided, and the institution must not grant a mortgage to a member unless the Regulations have been complied with.
8.-(1) The Fund shall enter into an agreement with the institution to prescribe the manner in which the these mortgage shall be provided as described Regulations. in (2) The institution shall not grant a mortgage to a member unless the provisions of these Regulations have been complied with. Requirements for furnishing mortgages PART IV AMOUNT AND REQUIREMENT OF THE COLLATERAL Amount of collateral
Part
PART IV
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Amount of collateral
AI-assisted research summary: The amount used as home mortgage collateral must not be more than 50% of the member’s benefit entitlements when the application is made.
9. The amount to be accessed for the home mortgage collateral under these Regulations shall not exceed fifty percent of the member’s benefit entitlements at the time of application. 6 Social Security (Use of Members Benefit Entitlements as Collateral for Home Mortgage) GN. NO.141 (Contd.) Collateral for mortgage - 10 Verify source ↗
Collateral for mortgage
AI-assisted research summary: The Fund may not furnish collateral for a home mortgage unless the stated conditions are met, including the member’s consent and a first-collateral arrangement.
10.-(1) The Fund shall not furnish a collateral for home mortgage under these Regulations unless such mortgage is granted pursuant to the following conditions: (a) the house subject to the mortgage is made the first collateral in the mortgage; (b) the member has consented to the Fund for his proportion of entitled benefits to be assigned as a collateral for home mortgage. (2) Prior to the approval of the amount of a collateral, an institution shall satisfy the Fund that adequate insurance arrangements have been made in respect of the loan and the property for which the loan is advanced. PART V VALIDITY OF THE COLLATERAL Validity of collateral
Part
PART V
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Validity of collateral
AI-assisted research summary: A collateral issued under these Regulations remains valid until any of the listed events happens.
11. A collateral issued under these Regulations shall remain valid until- Execution of collateral (a) cessation of membership from the Fund pursuant with respective law governing the Fund; (b) a member has made repayment of the mortgage in full subject to confirmation from the Institution; (c) a member and institution have engaged into an arrangement that contravenes with the provisions of these Regulations. - 12 Verify source ↗
Execution of collateral
AI-assisted research summary: A collateral may be enforced after a member defaults and the institution shows that recovery efforts have been fully and reasonably exhausted. Payments made by the Fund for that collateral are deducted from the member’s payable benefits, and the Fund cannot pay more than the guaranteed amount.
12.-(1) A collateral issued under these Regulations shall be enforced when a member has defaulted and institution has provided adequate evidence that all recovery means, including the use of the first collateral subject to the terms of the agreement, have been fully and reasonably exhausted. (2) Any payments in execution of a collateral paid by the Fund to an institution in accordance with the provision of these Regulations shall be deductible from the payable benefits of the member. (3) The amount to be settled by the Fund in execution of a collateral shall not be more than the guaranteed amount. 7 Social Security (Use of Members Benefit Entitlements as Collateral for Home Mortgage) GN. NO.141 (Contd.) Dispute resolution Reporting Transfer to another scheme Totalisation - 13 Verify source ↗
Dispute resolution
AI-assisted research summary: If certain disputes arise under the Regulations, the Fund or the Division must act as mediator.
13.-(1) In case the dispute arises between the member these institution regarding arrangements under and Regulations, the Fund shall act as a mediator. (2) In case the dispute arises between the Fund and institution regarding arrangements under these Regulations, the Division shall act as a mediator. - 14 Verify source ↗
Reporting
AI-assisted research summary: The Fund must send the Division a quarterly return about collaterals issued and loans repaid, including collaterals ceased and executed.
14. The Fund shall submit to the Division on quarterly basis a return indicating the number and amount of collaterals issued as well as detail of loans repaid and collateral ceased and executed. PART VI TRANSFER FROM ONE FUND TO ANOTHER
Part
PART VI
- 15 Verify source ↗
Transfer to another scheme
AI-assisted research summary: A transfer by a member from one Fund to another does not vitiate the Regulations.
15. Transfer by a member from one Fund to another these the collateral issued under shall not vitiate Regulations. - 16 Verify source ↗
Totalisation
AI-assisted research summary: A member who has contributed to more than one Fund has a right to totalisation under guidelines issued by the Division.
16. Any member who has contributed to more than one Fund, for the purpose of these Regulations, shall have the right to totalisation in accordance with totalisation of period of contribution guidelines issued by the Division. 6th February, 2024 Dodoma, JOYCE L. NDALICHAKO, Minister of State, Prime Minister's Office, Labor, Youth, Employment and Persons with Disability 8
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