Social insurance coverage remains very low in VN

Both employers and employees need to change their attitude and approach to improve the very low rate of social insurance coverage in the country, experts say.

Healthcare at a hospital in Nam Dinh Province. Social insurance coverage rate in some sectors is reported very low. (Photo: VNA/VNS)

Healthcare at a hospital in Nam Dinh Province. Social insurance coverage rate in some sectors is reported very low. (Photo: VNA/VNS)

A survey commissioned by the Ministry of Labour, Invalids and Social Affairs found just 23 per cent of the nation’s labour force receiving any social insurance coverage in 2015, with the figure for salaried workers also a low 58 percent.

The survey results were presented at a conference held in Hanoi last Friday by the Labour Ministry and the International Labour Organisation.

The survey showed that the social insurance coverage rate in some sectors was very low. In the construction sector, for instance, just six per cent of salaried workers were covered, while 20 percent received coverage in the furniture and bamboo craft sector.

Paulette Casttel, an expert with the International Labour Organisation in Vietnam, said that although the social security system had been open to private sector workers for more than 20 years, the share of retired people from the private sector in the total number of old-age pensioners was growing very slowly.

The rate of participants in voluntary social insurance scheme in Vietnam remained low, she said, adding that there was a high incidence of early withdrawal when employees retired or otherwise left.

Regarding low social insurance coverage in the construction and bamboo sectors, she said research showed that these sectors tended to use a lot of temporary workers hired by verbal agreement, or provide day-to-day work, only keeping a small core of permanent workers.

In the companies’ view, only the permanent employees were entitled to labor contracts and social security coverage, she said.

And even among the workers, it had been seen that there was a strong preference for short-term income gains than social benefits, she added.

Nguyen Thi Dieu Hong, a social security consultant, said that lack of “interconnections” between compulsory and voluntary social insurance schemes, as also schemes within the social protection system were key reasons for the low rate of social insurance coverage in Vietnam.

Weak enforcement of the Law on Social Insurance and weak compliance  by businesses’ also led to high social insurance payment debt, particularly among non-State businesses, she said.

Low awareness among workers about the meaning and benefits of social insurance also kept them outside the system.

Hong suggested that authorities encourage the people’s ability to self-guarantee social protection by developing a multi-tier social insurance system with links between compulsory and voluntary social insurance. The system should be funded and developed with citizens’ contributions and the State’s supports and guarantees.

Strengthening communication to raise the awareness and importance of social protection policies in general and social insurance policies in particular was also needed, she said.

She also suggested the establishment of an enterprise satisfaction index on social insurance administrative procedures and for studies to be conducted on limitations in social insurance participation of various stakeholders. This would enable evidence-based adjustments to legislation and statutory documents, she said.

Casttel of the ILO recommended that authorities co-operate with trade unions and business associations to increase workers’ awareness about social rights (fringe benefits, paid holidays, etc.), including social security; rights and obligations. This would reduce fear and anxiety among workers and increase their interest in social insurance schemes, she said

In order to reduce fears of non-compliant competitors, it was necessary to organise compliance drives on geographical basis and target specific sectors and co-ordinate the actions with employers’ organisations, she said.

For enterprises that are not registered, a transitional period can be allowed for small firms to join social security schemes. Small firms should also be supported to join with access to credit and relevant training, etc, she added.

Vietnam has set a target of having half its labour force covered by social insurance by 2020. 


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