Tuesday, October 25 2016


Unofficial workers lack social insurance

Update: September, 18/2015 - 08:23
Migrant workers hired to carry goods at the Long Bien Market in Ha Noi. Few of the informal labourers in the country are covered by social insurance. — VNS Photo Truong Vi

HA NOI (VNS) — Just five per cent of informal labourers across Viet Nam are covered by social insurance, posing a potential risk that millions of workers will be without any pension to support their later years.

A study by the Institute of Labour Science and Social Affairs shows that up to 37 million labourers work in the unofficial sector, accounting for 71 per cent of the domestic workforce. They can be farmers, seasonal workers, home helpers, or street vendors.

Those workers contributed more than 32 per cent to the nation's annual GDP, yet about 35 million of those will not have a pension when they get older and are incapable of working anymore.

The numbers were released yesterday in a workshop held by the Red Organisation about the challenges in realising the national target of 50 per cent of the total labourers being covered by state social insurance by 2020. Many experts deem that goal as impossible judging the sluggish increases in insurance participation rates in recent years.

The national voluntary social insurance programme aims to provide insurance for the most vulnerable groups in the society, including workers without contracts and women.

Many intended beneficiaries, however, were unaware of the programme, even though it has been available since 2008, said Ngo Thi Ngoc Anh, director of the Centre for Gender, Family, and Community Development Research at another workshop on social protection for informal migrant workers on Tuesday.

Due to busy working schedules and the challenges in daily life, awareness of the social protection system is limited among migrant workers, she said.

‘What is it?'

"Social insurance? What is it? This is the first time I've heard of it," said Nguyen Thi Huong, a 45-year-old street vendor in Ha Noi.

She said that no one ever told her about something called voluntary social insurance.

A Network of Action for Migrant Workers in Viet Nam (Mnet) survey shows that only 16.4 per cent of informal migrant workers received consultations on social insurance and 8.6 per cent are aware of the matter.

Many learnt about the insurance, yet they simply could not afford it.

Bui Minh Hung, 39, from Nam Dinh province said he earns between VND3 million and 4 million (US$136-$181) a month from the job he has been doing for the last four years in Ha Noi. This money barely keeps him afloat, so setting money aside to buy insurance for a pension when he retires is impossible.

"I know buying this insurance would be good for me when I get old and can no longer work. But I can't afford it," Hung said.

In order to make social insurance more approachable to the workers, the amended Social Insurance Law in 2014 reduced the monthly amount the informal workers has to pay for social insurance down to a minimum of 22 per cent of the poor household's income in rural areas, said Social Insurance Department Director Tran Thi Thuy Nga.

It indicated that the workers only had to pay about VND176,000 (US$7.8) a month for the insurance, which was more affordable to most of the workers.

The intention was good, said Nguyen Ngoc Quynh, an analyst on Social Protection of the United Nations Population Fund, but it might not help the workers as much as the policymakers expected.

"If the workers pay a low insurance amount, it means that they will also receive a low pension," Quynh said. "A pension amount based on a poor household's income is very likely to fail to support the workers when they get older, which then will burden the government's budget to help them out."

Experts warned that unless the government could work on a variety of state social insurance packages designed specifically to the certain needs of each group of informal workers, they would continue to turn their back on social insurance, which was "an alarming situation as at least 50 per cent of the elderly have already lived without pension since 2014 and the number is likely to increase," Quynh said.

Meanwhile, the latest report by the General Statistics Office of Viet Nam says that the country's population already passed the "golden population structure" - when the workforce outnumbered dependents, and will officially step in the "aged stage" - when the elderly account for at least 10 per cent of the population, in just two years from now on. — VNS

Send Us Your Comments:

See also: