Proposal to triple the penalty for late payment of social insurance contributions.

In response to the increasing number of delayed and overdue social insurance payments, the draft amended Social Insurance Law proposes increasing the interest rate that businesses must pay for late social insurance payments to three times the current rate.

Receiving applications and processing social insurance benefits at the Hanoi Social Insurance agency. (Source: VNA)

This information was provided by Ms. Tran Thi Thuy Nga, Director of the Social Insurance Department (Ministry of Labor, Invalids and Social Affairs), at a workshop to gather opinions on the draft amended Social Insurance Law, organized by the Ministry of Labor, Invalids and Social Affairs in collaboration with the World Bank (WB) this morning (June 4th) in Hanoi.

Specifically, according to Ms. Tran Thi Thuy Nga, the proposed interest rate for businesses that are late in paying social insurance contributions is three times the interest rate on investments from the social insurance fund or twice the interbank interest rate.

Ms. Tran Thi Thuy Nga commented that currently, the interest rate that businesses have to pay for late social insurance contributions is low, leading to an increasing number of businesses delaying or defaulting on social insurance payments to obtain working capital, resulting in employees not receiving full social insurance benefits. Therefore, increasing the interest rate will encourage businesses to strictly comply with regulations on social insurance payment deadlines.

In addition to increasing interest rates, the draft law will expand the scope of social insurance participants, remove the age limit for voluntary social insurance participation, grant employees the right to health insurance during maternity leave, amend regulations on sickness benefits for long-term illnesses, and stipulate a roadmap for increasing the retirement age in line with the mandatory social insurance scheme...

At the workshop, reviewing the process after 6 years of implementing the Social Insurance Law, experts noted that the awareness of workers, employers, and society has undergone positive changes. All workers can participate in social insurance through both mandatory and voluntary forms. Social insurance schemes have been designed more appropriately, better ensuring the principle of contribution and benefit; and the payment of social insurance benefits is fully guaranteed...

However, the Social Insurance Law, when implemented, also revealed several limitations that need to be addressed, such as: Ineffective management of those subject to mandatory social insurance; the prevalence of unpaid or delayed social insurance contributions; numerous inadequacies in some regulations within the social insurance system; and regulations regarding procedures and documentation for participation in and entitlement to social insurance benefits that are not yet easy or convenient.

Contributing to the draft, delegates at the workshop suggested that amendments and additions to the Social Insurance Law should promptly address shortcomings and obstacles in the implementation process, especially in ensuring the rights of social insurance participants; specify and clarify the responsibilities of state management agencies in managing the social insurance sector; and gradually and steadily expand social insurance coverage to all workers…

The delegates also suggested that the draft law should strengthen regulations on sanctions for violations of social insurance laws, ensuring deterrence, limiting violations, and protecting the legal framework of social insurance; the implementation of social insurance should be simple, easy, convenient, and ensure timely and full benefits for social insurance participants...

Introducing the draft Law on Social Insurance (amended), Ms. Tran Thi Thuy Nga stated: The draft Law on Social Insurance (amended) removes a chapter on unemployment insurance, and combines and adds several articles to ensure consistency. After revisions, the structure now consists of 10 chapters and 120 articles instead of 11 chapters and 141 articles as in the current law.

The Ministry of Labour, Invalids and Social Affairs will continue to gather feedback on the draft Law on Social Insurance (amended) in Ho Chi Minh City on June 6, 2013, in order to finalize it for submission to the Government. It is expected that the draft will be presented to the National Assembly for consideration at its 6th session at the end of 2013.

According to (Vietnam+) - LT