Participating in social insurance brings people pensions and health care when they age

One-off social insurance claim: Missing the opportunity to enjoy pension and health insurance benefits

The main reason why workers choose one-off social insurance claim is because they need an immediate expenditure to make a living as they have difficulties finding jobs during the COVID-19 epidemic. In addition, a number of employees still holds the concept that offsprings shall rely on their parents when they are young and parents shall rely on them when they age. People have not yet formed a habit of ensuring their own social security rights in their old age or paying social insurance premiums to benefit from pensions, not being dependent on your children.

The fact that employees is leaving the social insurance system is a concerning situation, which not only directly affects their rights, but also impacts the Government's goals, efforts and determination to apply social security regimes for the entire population and leave no one behind. The reason is that one-off social insurance claim can only solve immediate economic needs. However, it would be a huge disadvantage for the employees in the long run once the working age ends.

One-off social insurance claim shall limit the benefits of employees comparing to enjoying pensions, including:

1. If one later re-participates in social insurance, the time of payment will not be added cumulatively but considered a new contribution time period. As such, the employee will miss the opportunity to receive pension and have no income when the working age ends; or even if there is still enough time to enjoy pension, the pension amount will be low due to the short time period of contributions, resulting in losing financial support and the stability of life once the working capacity is reduced and the working age ends.

2. During the entire period of pension entitlement (where one is most likely to encounter health risks), employees are covered by the social insurance fund to issue a free health insurance card (pensioners do not have to self-purchase health insurance cards) and enjoy health care benefits. When an pensioner unfortunately dies, his/her funeral carer is entitled to a lump-sum funeral allowance equaling 10 times the basic salary in the month of the death; and his/her relatives are entitled to a monthly or lump-sum survivorship allowance.

3. The contributions to the social insurance fund is of one’s valuable savings, which will not vanish but be managed and invested by the social insurance agency for growth. Participants can reserve the payment time then continue to participate in compulsory social insurance or voluntary social insurance with the support of the State once they have conditions. During the reservation period, if one accidentally dies, his/her families are entitled to funeral allowances and their relatives are entitled to survivorship allowances as in the regulations.

4. One-off social insurance claim results in a huge loss since 22% of the monthly salary contributed to the retirement and survivorship fund equals the total annual payment of 2.64 months of salary. Meanwhile, the amount of one-off social insurance claim per year is only equal to 1.5 months of the average monthly salary contributed to social insurance in the years before 2014 and 02 months of average monthly salary contributed to social insurance from 2014 onwards.

5. Pension rate is periodically adjusted according to the consumer price index and economic growth.

Thus, one-off social insurance claim will be a disadvantage as all amount of retirement fund would be spent before one reaches the retirement age. As a result, the elderly may have to depend on their children, grandchildren and the society; If unfortunately getting sick without health insurance cards, they may also face the risk of not even being able to pay for medical care fees of one disease that requires hospitalization for a long time, thus facing poverty and becoming a burden to the family and society.

In brief, taking one-off social insurance claim into serious consideration is vital to every worker. Vietnam Social Security recommends not choosing to miss the opportunity to enjoy pensions to cover lives over an immediate benefit, as well as the opportunity to benefit from health insurance in the field of health care in old age.

Unemployment insurance policy – A "life buoy" for employees during the COVID-19 epidemic

During this period, if workers are unemployed, they should register to receive unemployment benefits and vocational training allowance or to be assisted by the Government's Security Package. Once the COVID-19 epidemic comes to an end, the economy will continue to operate; employees will have the opportunity to return to the labor market and continue to contribute to social insurance in order to be sequentially added to the duration of pension entitlement in the future.

The unemployment insurance regimes employees are entitled to: The amount of unemployment allowance is equal to 60% of the average monthly salary contributed to unemployment insurance in 6 preceding months previous to unemployment, not exceeding 5 times by the basic salary or the regional minimum wage; Benefiting from the health insurance regimes as in the regulations for medical examination and treatment with health insurance; Receiving vocational training support (up to VND 1 million/person/month); Free job consultation; Being trained, fostered thus enhancing vocational skills.

Unemployment insurance policy is considered a "life buoy" to employees before the negative effects of COVID-19, partly helping to ensure lives of a number of unemployed workers and their families, contributing to the stability of the country’s economy and society.

Social insurance, health insurance, unemployment insurance are preeminent social security policies of the Party and the State, aiming for the immediate benefits (health insurance, sickness, maternity, labor accident - occupational disease, unemployment, etc.) and long-term benefits (retirement, survivorship). Hence, both immediate and long-term benefits should be taken into consideration. One-off social insurance claim is rather not among the options so that people can ensure social security for themselves, especially at the end of the working age./.