MoLISA proposes loosened conditions and requirements for access to COVID-19 relief package

The Ministry of Labour, Invalids and Social Affairs (MoLISA) this week has proposed to loosen conditions for access to support package, aimed at assisting businesses and workers, in the face of the ongoing COVID-19 crisis.

Many businesses complain they have failed to have an acess to the first economic relief package. Source: VNA

Businesses and workers affected by the pandemic will likely have more opportunities to get access to the VND 62 trillion (USD 2.6 billion) package, the first of its kind financed by the Government during the COVID-19 outbreak period.

This is part of a proposal sent to the Government by MoLISA this week, revising and supplementing the Government’s Resolution 42/ND-CP on supporting people facing difficulties caused by the pandemic.

The resurgence of the SARS-COV-2 virus in late July dealt a blow to production and business, as well as tourism services. According to the Ministry of Planning and Investment (MPI), the disease will continue to be complicated in its nature and it remains unknown when the global economy will completely recover.

Therefore, it is currently very important to propose swift solutions and policies in order to cushion the impact of COVID-19, maintain production, and take advantage of opportunities in an effort to reboot the economy in a rapid manner and at a low cost.

If the proposal is approved, the number of beneficiaries is expected to increase.

People who had to stop working temporarily will enjoy financial support from February 1, this year, instead of the current regulation from April 1.

Regarding conditions for loans to pay salaries during the work stoppage, the Government is proposed to remove the requirement that employers have paid at least 50 percent of the work stoppage salary. This proposal is in accordance with Clause 3, Article 98 of the Labour Code.

MoLISA also recommended revisions to loan applications, procedures, approvals and disbursement, in which the employers will self-declare and take responsibility for the accuracy of the number of employees who stopped working, as well as their revenue, that satisfies the loan conditions as prescribed.

Workers receive gifts after losing jobs due to COVID-19 in Ho Chi Minh City. Photo: VNA

On the fifth day of each month, the employers will send the loan application to the Bank for Social Policies and its branches and offices.

Despite this, experts say the disbursement of the three packages has been at a snail’s pace, affecting the recovery plans of local enterprises.

An incomplete survey by the Vietnam Chamber of Commerce and Industry revealed that only 20 percent of businesses have received support from the Government’s packages during the COVID-19 pandemic.

Meanwhile, a report from the Hanoi Association of Small and Medium Enterprises (Hanoisme) showed that, up to June 10, more than 400 workers who had stopped working had received financial support from the VND 62 trillion package.

Businesses have welcomed the Government’s VND 180 trillion tax cut relief package, but have noted that the package is essentially meaningless as it only applies to businesses that operate at a profit.

Dr. Nguyen Dinh Cung, former director of the Central Institute of Economic Management, a member of the Prime Minister’s Economic Advisory Group, says that although the Government’s policies are appropriate, they are fragmented.

“In fact the number of businesses benefitting from the relief package is limited. For example, only businesses that have still operated profitably are eligible for the tax deferral policy. By contrast it does not help those operating without profit, or even those facing losses,” he explains.

According to the expert, although the policies are very good ethically, the conditions necessary to enjoy the policies are impractical, to the point they may even have a negative effect. For example, with regard to firms that have laid off 50% of their workforce or lose 50% of their assets, it will take plenty of time in order to evaluate their status, when they are in dire need of immediate support to recover.

“Our main goal is to help businesses maintain operation, but with such conditions, businesses might try to downsize their workforce to take advantage of the policy,” Dr. Cung notes.

Sharing Dr. Cung’s view, To Hoai Nam, Secretary General and Vice Chairman of the Vietnam Small and Medium-sized Enterprises Association, points out that the Government’s policies are correct, although it is dependent on the ministries to set relevant conditions.

Phuong Minh