The Ministry of Labor, Invalids and Social Affairs has responded to the Vietnam Textile and Apparel Association on the proposal to research and reduce the social insurance payment rate.
Regarding this recommendation, the Ministry of Labor, War Invalids and Social Affairs said that social insurance is a guarantee to replace or partially compensate employees’ income when their income is reduced or lost due to illness, maternity, or work accidents. unemployment, occupational disease, reaching the end of working age or death, based on contributions to the Social Insurance Fund.
Therefore, regulations on social insurance payment rates need to be considered in determining models, policies, benefits of employees and their relatives, coverage levels, and other factors. macroeconomics, economic development, GDP per capita.
According to the Ministry of Labor, Invalids and Social Affairs, Vietnam is one of the countries with a relatively high social insurance payment rate compared to some countries in the region. However, according to the benefit ratio, the benefits of sickness and maternity benefits are considered high, especially the retirement benefits.
Currently, the pension level in Vietnam is the highest in the world with a maximum rate of 75%, while other countries maintain it at 35 – 50%.
According to the Ministry of Labor, Invalids and Social Affairs, adjusting the social insurance payment rate will greatly impact a part of social insurance participants in particular and society in general. Therefore, keeping the current social insurance payment rate will contribute to ensuring the stability of social insurance policy and workers’ rights.
The 2014 Social Insurance Law stipulates that the compulsory social insurance payment rate for employees and employers is 32%. Of which, employees pay 10.5%, including social insurance 8%, health insurance 1.5%, unemployment insurance 1%; The employer pays 21.5%, including social insurance 17.5%, health insurance 3% and unemployment insurance 1%.
The draft Law on Social Insurance (amended) has been submitted to the National Assembly by the Government, the social insurance payment rate remains the same as current regulations to ensure stability and sustainability of social insurance policy.
The actual wages received by workers are still low
Ms. Ho Thi Kim Ngan, Deputy Department of Labor Relations (Vietnam General Confederation of Labor) said that the pension rate of 75% is high compared to international regulations. However, the amount of money that employees are entitled to is based on their salary as the basis for paying social insurance.
According to Ms. Ngan, currently the salary as the basis for paying social insurance for employees is low, so even though the benefit level is up to 75%, the pension is still low.
“In fact, workers and businesses pay social insurance only 5-7% higher than the regional minimum wage, so of course when they reach the end of working age, pensions will be low,” Ms. Ngan said.
A representative of the Ho Chi Minh City Labor Federation said that according to regulations, workers’ social insurance contributions are based on salary and regular accompanying allowances.
However, in reality, businesses “circumvent” by dividing it into 2 parts and only paying a level equal to or higher than the minimum wage, while allowances are not counted, so employees pay very low social insurance contributions.
It is worth mentioning that, despite knowing that social insurance premiums are low, they still “tacitly agree” not to have to pay 10% of the difference to the social insurance fund from allowances. However, the nature of social insurance contributions belongs to the employee. When businesses “circumvent the law”, workers do not have to pay an additional 10% but lose the 22% that businesses should have paid more for workers.
In fact, Vietnam Social Insurance has conducted specialized inspections and discovered that some units declared additional income outside the salary calculated for social insurance contributions. This is an amount that the enterprise agrees with the employee when recruiting and is not stated in the contract.
The Ministry of Labor, Invalids and Social Affairs also pointed out that in businesses there are always 3 types of employee income: The type used as a basis for paying social insurance, the type used for final settlement and the type paid to employees.
The income used as a basis for paying social insurance is always at the lowest level, only equal to the regional minimum wage plus 7% for workers with vocational training and an additional 5-7% for people doing heavy and dangerous jobs.
