Social Insurance Policies Ensure Social Security Amid Pandemic

Since the outbreak of Covid-19 pandemic, the Government has offered timely assistance to people and businesses, especially those belonging to vulnerable groups, to help them challenge. Among supportive packages, social security policies play a leading role.

A number of supportive policies for employees, especially women and children affected by Covid-19, have been launched by the Government. Illustrative Photo Vietnam Times

The Government enacted Resolution 42/NQ-CP dated April 9, 2020 and Resolution 154/NQ-CP dated October 19, 2020 presenting measures and policies to support people and businesses facing difficulties due to Covid-19.

The resolutions state that if, due to the pandemic, an employer is forced to reduce its workforce by 50 per cent or more (compared to its workforce at the time the pandemic was declared), both the employer and its employees will be permitted to suspend their contributions to the pension and survivor funds of the employees for a maximum of 12 months.

A reduced workforce includes employees whose work has been suspended, whose labor contract performance has been postponed or who take unpaid leave.

The Vietnam Social Security (VSS) suspended contributions to the pension and survivor funds for 1,846 units/enterprises with 192,503 laborers. The total suspended contributions reached VND786 billion.

In the fourth wave of the pandemic which lasted from April 27, 2021, the Government continued to issue Resolution 68/NQ-CP dated July 1, 2021 on certain policies to support employers and employers in difficulty due to Covid-19.

The resolution consists of 12 supportive policies mobilizing assistance from social security, unemployment and labour accidental funds.

One of note-worthy policies are reduction of compulsory contribution rate to occupational accidents and diseases fund.

Employers are entitled to a 0 per cent payment rate of their salary fund to the Insurance fund for Occupational Accidents and Diseases (for 12 months (from 1 July 2021 to 30 June 2022).

Employers are to use the reduction in contributions to the Occupational Accidents and Diseases Fund to support the employees against the COVID-19 pandemic.

The deferral of contributions from employers and employees to the Retirement and Death Fund applies for employers who have paid full social insurance contributions or have temporarily suspended contributions to the retirement and death fund after April 2021 but are affected by the Covid-19 pandemic, resulting in a downsizing by 15 per cent of their employees participating in social insurance, including employees who cease working/suspend labour contracts/agree to unpaid leave.

Employees and employers are entitled to deferral of payment to the Retirement and Death Fund for six months from application submission.

For the cases entitled to the deferral according to Resolution 42/NQ-CP dated 9 April 2020 and Resolution 154/NQ-CP dated 19 October 2020 by the Government, if being eligible, they are still entitled for deferral per this resolution, provided that the total deferral period does not exceed 12 months.

Resolution No 68 also mentions training funding support for employees.

Employers are entitled to financial support for training, re-training and improvement of vocational skills from the Unemployment Insurance Fund once they fully pay unemployment Insurance contributions for employees for 12 months or more up to the date of requesting support.

They are also entitled to financial support if they change the structure or technology according to the provisions of Clause 1, Article 42 of the Labour Code; have revenue of the preceding quarter before requesting support decreasing by 10 per cent or more compared to the same period in 2019 or 2020; and have a plan or cooperate with a vocational education institution in developing a plan for training, retraining and improving vocational skills and qualifications in order to maintain jobs for employees.

The monthly entitlement is maximum VND1.5 million for each employee. Entitlement period is for a maximum support term of six months.

Applications for this support are to be submitted from 1 July 2021 to 30 June 2022.

The Resolution No 68 has so far supported 378,690 employers and over 11,57 million employees with total assistance worth nearly VND5.1 trillion.

The VSS has announced the reduction of compulsory contribution rate to Occupational Accidents and Diseases Fund from July 2021 to June 2022 to 378,060 employers with nearly 11.46 million employees.

The total reduction is estimated at more than 4.3 trillion.

Laborers wait for completing procedures to receive supportive packages. Illustrative Photo Vietnam Times

The deferral of contributions from employers and employees to the Retirement and Death Fund has been applied in 54 out of 63 provinces and cities nationwide for 630 employers and 113,444 employees. The total reduction is about VND777 billion.

Seventeen employers nationwide applied for financial support for training, re-training and improvement of vocational skills from the Unemployment Insurance Fund to support 1,308 employees.

On September 24, 2021, the Government enacted Resolution No 116/NQ-CP on support policy for employees and employers affected by the Covid-19 from the Unemployment Insurance Fund.

Employees affected by the pandemic shall receive support in cash ranging from VND1.8 million to VND3.3 million for each from the Unemployment Insurance Fund’s surplus balance.

Employees eligible for this support are those who are paying unemployment insurance premiums as of September 30, 2021 (excluding some subjects) and those who have stopped paying unemployment insurance premiums due to the termination of labor contracts or working contracts in the period from January 01, 2020, to the end of September 30, 2021, with the unemployment insurance premium payment period reserved in accordance with the law on employment, excluding persons who are enjoying to monthly pensions.

Those not qualified include employees working at State agencies, political organizations, socio-political organizations, armed forces units and public units whose recurrent expenditures are guaranteed by State budget.

Employers that have been paying in unemployment insurance premiums before October 01, 2021 as prescribed are allowed to reduce the contribution rate from 1 per cent to 0 per cent of the monthly wage fund of the employees obliged to participate in unemployment insurance.

The reduction will be valid in 12 months from October 1, 2021 until September 30, 2022.

It is estimated that more than 13 million laborers and about 386,000 employees will benefit from support policies of the Unemployment Insurance Fund.

Timely launching of policies with minimized administrative procedures and IT application have brought the supportive packages closer to people and businesses so that they can overcome difficulties due to the pandemic’s impacts.