The legislation on the loan by proxy: 9 steps

The delegated loan is aimed at permanent employees with permanent contracts and can help to cover expenses in different circumstances. It is also known as double fifth, it can be requested by those who already have a loan with Cessione del Quinto, but the accumulation between the installment of the Cession of the Fifth and the Loan by proxy must not exceed 40% of the net salary.

Here are summarized, in 9 points, the most important steps of the legislation that governs the loan by proxy.

What is the law?

The legislation on the loan by proxy is regulated by articles 1269 “Delegation of payment” and 1723 “Revocability of the mandate” of the Civil Code.

In 1996 the Ministry of the Treasury launched, through the issuance of circulars n. 46 and n. 63, the regulatory process of the institution of the delegation, continued then in 1998, with the issue of Circular no. 29 and in 2003 with the Circular n. 37.

The delegation of payment contemplates the same procedure and the same rules of the assignment of the Fifth, both as regards the instruction of the file and the requisites necessary to obtain it. Here are the main steps.

The legislation on the loan with proxy summarized in 9 points

  1. Circular n. 46 of 8 August 1996 of the Ministry of the Treasury: provides for the admissibility of withholdings by delegation of payment, in favor of the Institutes indicated in art. 15 of Presidential Decree 180/1950.
  2. Circular n. 63 of October 16, 1996 of the Ministry of the Treasury: establishes the constraints to which loans must be subordinated (Institutes referred to in Article 15 of Presidential Decree 180/1950, compliance with the transferability limits pursuant to Presidential Decree 180/1950, recognition of administrative burdens third yield); reiterates that for loans pursuant to art. 58 of Presidential Decree no. 180/1950 there is a legal obligation to give them free of charge, while for the delegations dealt with by Treasury circulars, the burden to be paid by the paying agencies to reimbursement of the costs for the management of the service of withholdings on salaries.
  3. Circular n. 29 of 11 March 1998 of the Ministry of the Treasury: establishes the extent of the burden to be charged to the delegate.
  4. Circular n. 37 of 5 September 2003 of the Ministry of Economy and Finance – General Accounting Office of the State: provides that, in the event co-existing two contracts, related to the assignment of the Fifth and loan by proxy, the limit of maximum transferable quota is that provided under art. 70 of the Presidential Decree 180/1950 (half of the salary), while the quota for the loan by proxy can not exceed one fifth.
  5. Circular n. 21 of 3 June 2005 of the Ministry of Economy and Finance – General State Accounting Office: indicates the duration of the delegation and the coexistence of a contract for the assignment of the fifth salary and a loan by proxy.
  6. Circular n. 554 of 29 July 2005 of the Ministry of Economy and Finance – Central Directorate of Various Services: reiterates that it is not possible to contract delegation in the event of the presence of the Cession of the Fifth and small loan ex lege 656/60.
  7. Circular n. 13 of 13 March 2006 of the Ministry of Economy and Finance – General State Accounting Office: regulates certain procedural aspects by limiting the duration of the formal delegations to 36 months, unless otherwise specified.
  8. Circular n. 646 of 13 April 2006 of the Ministry of Economy and Finance – Central Directorate of Various Services: clarifies that the duration of the proxies remains the one agreed by the parties in the individual loan agreements pursuant to art. 1372 of the Civil Code.
  9. Circular n. 654 of 20 April 2006 of the Ministry of Economy and Finance – Central Department of Various Services: specifies that the duration of the proxies remains the one agreed by the parties in the individual loan agreements pursuant to art. 1372 of the Civil Code.