Vietnam News

Covid forces workers to quit social security, withdraw accumulated premiums

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The Vietnam Social Security has said it is “concerned” that Covid-19 has forced many people to exit the social insurance safety net.

In the first 10 months of this year more than 700,000 people registered to exit the social insurance scheme and withdraw the accumulated premiums they and their and employers had paid, 5.5 percent more than in the same period last year, the VSS said.

To be eligible for retirement pensions, employees need to pay the premium for at least 20 years.

In most cases the withdrawal was due to the economic stress caused by the Covid-19 pandemic, especially in economic and industrial hubs like Ho Chi Minh City and Binh Duong and Dong Nai provinces, the VSS said.

It is “a matter of concern” that people are quitting the social insurance scheme since this would directly affect both labor rights and social welfare, it said.

According to current regulations, the condition for employees to withdraw the accumulated premiums is that they have been unemployed for a year and paid social insurance premiums for less than 20 years.

Le Minh Ly, director of the Binh Duong Social Security, said most workers in the province are migrants, and decided to leave for their hometowns when they lost their jobs.

“As they need money to start a new life, the one-time social insurance withdrawal is normally their first choice,” especially with the pandemic threatening to make it hard to find new jobs, she said.

She feared that, with the pandemic continuing to have an economic impact, more people would register to exit the social security system.

The VSS warned that while the withdrawal would allow workers to meet their immediate financial needs, it would take away their post-retirement pension, health insurance cover and death benefits.

In the long run a large rate of seniors without pensions would place great pressure on social security, it said.

A report published in April by the Hanoi University of Social Sciences and Humanities and Germany’s Justus Liebig University Giessen, ‘Vietnam as an Ageing Society,’ said 64 percent of Vietnam’s 13.4 million people of retirement age did not currently have a pension.

Nearly 46 percent of people aged 60-64, 30 percent of people aged 70-79, and 10 percent of people over 80 still had to work for a living, it said.

Contracted workers have to pay social insurance premiums for a full 20 years to qualify for a pension when they retire, currently at 60 years and three months for men and at 55 years and four months for women.

The Ministry of Labor, Invalids and Social Affairs had in April proposed that workers should be made eligible for a pension if they pay social insurance for just 10-15 years, saying 20 years is too long.

It has also caused many to quit as a result. Meanwhile, in case laborers get employed with contracts again, they will have to start paying the insurance all over from scratch to reach the 20-year period, the ministry said in proposed amendments to the Law on Social Insurance.

By Hong Chieu & Le Tuyet – VnExpress.net – November 22, 2021

Covid forces workers to quit social security, withdraw accumulated premiums
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