by To Nhu
Many employees who work and buy social insurance rely on pensions as their main income when they retire, but few of them are smiling.
Dao Thi Vinh, a resident of Long Bien District in Ha Noi, used to work for a printing company in the city.
When she retired, she had been paying social insurance for 25 years. But what she received as a pension saddened her to the core.
"As we get old, most need to depend on a pension. But as prices increase day by day, I don't know how I'm going to carry on with such a small amount," she said, adding that her pension was VND1.7 million (US$80) a month.
A person's pension is based on 75 per cent of their salary on retirement. Vinh said her monthly income was about VND5 million (US$235).
However, the amount was divided into many small packages. The social insurance paid by Vinh's employer was based on the basic salary, or the amount stated in her labour contract, which was only VND2.3 million (US$108).
Dang Quang from the Institute for Viet Nam Workers and Trade Unions confirmed that many firms and businesses tried to divide their employees' income into many small packs to reduce payment for social insurance.
Even in labour contracts, employers would only mention the basic salary as the main income of employees, while in fact employees might receive more than that stated amount.
"So it's common for workers whose total incomes were VND8 million (US$377) a month to only receive the pension rate for VND2 million (US$94) a month," Quang said.
Mai Duc Chinh, vice president of the Viet Nam General Confederation of Labour, said that people who tried to live on their pension became poorer than the poor.
A relative of mine who lives in the country still has to do farm work and raise poultry at the age of 75 to make ends meet.
"The pension is not enough to cover our monthly spending, let alone when some one in the family is sick or when we want to buy some extra stuff," he said.
"Retired people need children who are capable of supporting them. If they don't, most of them have to work to earn more money. If they're sick and can't work, their lives become really hard," he added.
Pham Thanh Tung, a member of the Ha Noi Bar Association, said the revised Law on Labour should ensure that employers have to pay social insurance for their employees based on their full salary, not just the basic payment.
He said that most firms and businesses only based social insurance on the smallest possible amount by signing contracts with a minimum amount.
Tung said the short arm of the law was another reason for the problem.
"The law does not clearly explain what ‘other extra payments' in the salary structure mean."
Maybe, workers have another way out.
Pham Thanh Tung said labourers could buy additional voluntary insurance, according to which they can choose the insurance rate. However, few labourers have ever heard of the scheme.
Vinh from Ha Noi said when she was working she was so busy she did not have time to learn about it.
"I didn't know about the benefits of buying voluntary insurance. But if I had known, I would have certainly bought it," she said.
However, employers, who have to pay the equivalent of 18 per cent of a labourer's contracted salary for social insurance, do not contribute to the voluntary insurance.
National Assembly deputies are talking about revising the law on Social Insurance at their ongoing meetings. This would require changes on the rate of social insurance payments based on the total income of labourers.
The sad news is, even if the amended law is approved, it will not be effective until 2018. In the meantime, lawyers said labourers should learn how to protect their rights by negotiating with employers though trade unions. — VNS