Higher social insurance premiums to benefit workers

December 25, 2017 - 09:00

An increase in social insurance premiums that will accompany new rules that take effect next year will benefit workers, officials claim.

A worker receives information on social insurance at the Phú Thọ Social Insurance office. Experts believe that an increase in social insurance premiums will benefit workers. — VNA/VNS Photo Dương Ngọc
Viet Nam News

HÀ NỘI – An increase in social insurance premiums that will accompany new rules that take effect next year will benefit workers, officials claim.

At an online discussion on the Government portal on Friday, Lê Quân, Deputy Minister of Labour, Invalids and Social Affairs, said that the change in social insurance premium based on the actual monthly salary of workers was necessary to ensure their benefits once they stopped working.

It would lend stability to workers’ lives after retirement, he said.

According to Quân, at present, an employee’s social insurance contribution is based on wages and perks mentioned in the labour contract.

From January 1, 2018 onwards, it will cover wages, perks and other allowances, including those based on designation, responsibility, hazardous work and seniority, that are not mentioned in labour contracts.

However, Quân added that not all allowance and additional payments will be included calculating a worker’s social insurance contribution. Bonuses, telephone, patrol and lunch allowances will not be included, because they depend on the productivity of workers and the effectiveness of production and business activities of enterprises.

Quân said the new changes aim to address the situation of workers earning good incomes suffering after they retire because of low social insurance contributions.

Actual vs minium wage

Bùi Sỹ Lợi, Deputy Chairman of the National Assembly’s Social Affairs Committee, attributed the low post-retirement pensions to the fact that most enterprises’ social insurance contributions were based on the minimum wage.

He suggested that a regulation based on actual wages or income of employees should be considered carefully, so as to increase pensions and ensure better living standards.

Talking about the new policy’s impact on enterprises, Quân said: “Basically, the level of social insurance contributions of enterprises will not increase much after the new regulation takes effect. On some enterprises, it will not have any impact.”

Regarding the new calculation of pension for female workers from the beginning of next year, that many have complained is “unfavourable,” Quân said the Labour Ministry has coordinated with Việt Nam Social Insurance to review its impacts and submitted a report to the Government. The ministry is waiting for the government’s decision on the issue, he added.

Under current policy, male and female retirees who have bought social insurance for 30 and 25 years, respectively, are entitled to enjoy full monthly pension, equivalent to 75 per cent of their monthly salary.

Under the new policy, female labourers have to pay five premiums for five additional years to enjoy the maximum pension of 75 per cent of their monthly salary.

Trần Đình Liệu, deputy director of Việt Nam Social Insurance (VSI), said the agency had prepared well for the changes in social insurance policies, strengthening dissemination, speeding up administrative reforms and providing training for enterprises in social insurance-related work.

Criminal treatment

Liệu also said that as of January 1, next year, violations of the Law on Social Insurance, health insurance and unemployment insurance will be dealt with in accordance with the amended Penal Code.

He said that the 2015 Penal Code, which takes effect next year, has three supplementary articles providing for separate offenses in the field of social insurance, with fines of up to VNĐ3 billion (US$132,000) and imprisonment of up to 10 years.

At present, the VSI is cooperating with the Supreme People’s Court to develop a resolution of the Judicial Council on implementation guidance for the above-mentioned articles, Liệu said.

Evasion of social insurance happens in diverse ways and under various forms.

"Our view is not to criminalise all social insurance law violations,” he said, but added that the “criminal treatment” for the violations “is also to ensure fairness in business."

Sharing this opinion, Lợi, Deputy Chairman of the National Assembly’s Social Affairs Committee, said the three supplementary articles on social insurance violations would improve legal compliance and encourage a harmonious relationship between employers and employees. — VNS