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Due to COVID-19’s impacts on the labour market, more people who lost jobs tried to take one-time social insurance payments. Experts said unemployed people who made this decision might harm their benefits.

Le Dinh Quang, deputy head of VGFL’s Labour Relations Department, said Viet Nam recorded a high number of people taking a one-time social insurance payment and discontinuing their participation in the social insurance scheme, and this number tends to increase every year.

In 2006, there were only 240,191 one-time social insurance beneficiaries, accounting for 3.82 per cent of total social insurance card holders.

This figure jumped to 665,306 people, accounting for 4.7 per cent in 2016.

In 2020, as many as 897,000 people took one-time social insurance payment, equivalent to 5.57 per cent of social insurance card holders. Due to COVID-19, the number of people receiving one-time social insurance payment last year was even higher than the number of new social insurance participants.

The increasing number of one-time social insurance beneficiaries has posed great challenges to the goals of ensuring social security, expanding insurance coverage and further target of universal social insurance coverage as mentioned in Resolution No 28, Quang said.

People taking one-time social insurance payments will suffer from a number of disadvantages. Illustrative Photo

Taking one-time social insurance payments means that they leave the social insurance system and have their insurance benefits stripped, especially long-term benefits from retirement and mortality funds. This is a worrying situation as the rights and long-term social security policies for employees can not be assured, Quang said.

Employees will suffer from disadvantages in the short and long term. For example, they will not enjoy retirement wages and have nothing to live on when they get old, he said.

According to the current law, the level of retirement insurance premium is calculated at 22 per cent of monthly salary, of which, the employee pays 8 per cent and the employer pays 14 per cent. It means the total retirement premium rate paid to the social insurance fund every year is equal to salary for 2.64 months.

If the employee wants to take one-time social insurance payment, the level of payment is equal to two months of the average monthly salary for payment of social insurance premium.

Those who keep paying social insurance premium will enjoy 2.64 months of salary each year when they retire while those who discontinue social insurance premium and take a one-time payment will receive only two months of salary for each year of social insurance premium they have already paid.

When participating in social insurance to enjoy retirement benefits, in addition to a monthly pension, employees also have health insurance cards and have their treatment costs covered by the health insurance fund.

Quang said there were many reasons that forced employees to choose one-time social insurance payments, such as living difficulties, inflexible and unattractive social insurance policies, as well as easy procedures to discontinue insurance participation. Many employees do not fully understand the benefits of social insurance policy.

It is necessary to continue to improve the legal system and policies on social insurance because the one-time social insurance scheme is closely related to other social insurance policies, especially the retirement regime. It aims to ensure long-term social security following the provisions of the Constitution, address policy shortcomings, and make insurance policy more attractive to employees so that they volunteer to join, he said.

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Quang said the social insurance system must be developed towards flexibility, diversification with multilayers, modernisation and international integration.

He proposed softening the condition on the required social insurance participation time to enjoy retirement benefits; adjust the pension calculation to ensure equality; expanding compulsory social insurance network and stiffening sanctions to handle violations, especially evading or delaying social insurance payments and profiting from social insurance funds.

He also proposed reviewing and making amendments to the law on employment, unemployment insurance policy and other job policies with an aim to support labourers to stay in their jobs and ensure connection and flexibility of social insurance policies.

It is also necessary to strengthen communication to raise labourers’ awareness of social insurance policies as well as improve their quality of life, he said./.