Effective payment of short-term social insurance benefits through personal accounts

In mid-June, the factories at Haivina Kim Lien Company were bustling with labor and production. Taking advantage of the break, I chatted with some of the company's workers about the regime and policies for workers, and was excited to hear many of their reassuring and joyful shares.

Ms. Nguyen Thi Minh is a garment worker who has worked at the company for nearly 3 years. She said that the company ensures timely payments of salaries, bonuses, overtime pay, etc.; social insurance, health insurance, and unemployment insurance for employees are fully paid.

In particular, since July 2017, Ms. Minh and more than 2,500 employees at the company have had access to a convenient form of payment for sickness, maternity, and health recovery benefits, which is direct payment through their personal accounts.

Ms. Minh said: “The implementation was right when I was on maternity leave, so I was one of the first people in the company to benefit from this form of payment. When I saw the text message from the bank notifying the provincial Social Insurance to transfer the maternity allowance, I was very surprised and happy. It was so convenient, no need to wait a few months of maternity leave to go back to work, submit complicated documents and procedures like before.”

Produced at Haivina Kim Lien Company Limited. Photo: Phuoc Anh

Sharing the same excitement as Ms. Nguyen Thi Minh, during the process of meeting and talking with many workers at 3 units implementing the payment pilot, namely BSE Vietnam Electronics Co., Ltd., Matrix Vinh Co., Ltd., Haivina Kim Lien Co., Ltd., we all recorded positive feedback.

Employees said that for a long time, companies have been paying salaries, bonuses, meal allowances, etc. through personal accounts instead of cash as many years ago. Transactions through ATMs have also created familiarity and convenience, and around the company area there are many ATM transaction points of different banks. Therefore, the payment of sick leave, maternity leave, and health recovery benefits has changed from cash payment to transfer to personal bank accounts, which has been very well received by employees.

Ms. Le Thi Lam - a worker at BSE Vietnam Electronics Co., Ltd. shared: "This form of payment is very convenient, reducing inconvenience for workers because workers who receive benefits are sick or taking care of small children, so it is very difficult to go directly to the unit to receive money". Many workers also mentioned another benefit, which is to avoid the situation where some employers abuse the social insurance fund to prioritize other purposes.

Paying insurance benefits via ATM accounts is convenient for employees. Photo: Internet

For employers, when paying benefits through personal accounts, the unit does not have to organize the payment of social insurance benefits to employees, reducing workload and administrative procedures.

Ms. Bui Thi Ngoc - Head of Human Resources Department, BSE Vietnam Electronics Co., Ltd. said that for many years, the provincial Social Insurance has been paying benefits to employees through the employer's account, and then the employer transfers them to the employee. This "bridge" payment has more or less delayed the payment of benefits to employees. Therefore, when the provincial Social Insurance implemented direct payments through employees' accounts, the company's leaders responded very positively. Currently, the company has more than 3,900 workers, about a few hundred of whom are on maternity leave, raising young children, or are sick... The number of beneficiaries is very large, so the provincial Social Insurance's direct payment of benefits into employees' accounts helps the company reduce workload, save time, and increase productivity.

Piloted since July 2017, up to now, after nearly 1 year of implementing payment of sickness, maternity, and health recovery benefits into employees' personal accounts, statistics show that about 4,644/8,965 employees currently at the 3 above-mentioned companies have been paid benefits, with a total amount of more than 27.5 billion VND, accounting for 41.87% of total payment of sickness, maternity, and health recovery benefits at the provincial Social Insurance. Of which, BSE Vietnam Electronics Co., Ltd. has the largest number of beneficiaries - 1,950 people with more than 11.8 billion VND.
Convenience, speed and safety are obvious benefits, however, through the implementation process, this form of payment still reveals some shortcomings that need to be further coordinated to overcome.

Accordingly, the number of employees receiving short-term benefits through personal accounts is quite large, each time the social insurance benefits are settled, there are on average over 100 subjects, so when the unit updates the account number of each individual, errors are likely to arise. During the pilot period, the provincial social insurance discovered 13 cases of individuals belonging to BSE Vietnam Electronics Co., Ltd. with incorrect accounts, forcing them to transfer back.

Mr. Hoang Quang Phuc - Deputy Head of the Financial Planning Department, Provincial Social Insurance said: As soon as errors are discovered, Social Insurance officers immediately notify the company to correct and promptly pay benefits to employees. At the same time, the Provincial Social Insurance also regularly reminds employers to coordinate with employees to accurately declare the account number and name of the bank that opened the account of each employee to ensure accuracy.

Manufactured at BSE Electronics Vietnam Co., Ltd. Photo: Phuoc Anh

Mr. Hoang Quang Phuc also pointed out the fact that the payment of sickness, maternity, and health recovery benefits through personal ATM accounts incurs a larger transfer fee than making a one-time transfer to the employer, and this additional fee is entirely paid by the provincial Social Insurance. Employees benefit, but the burden of work becomes even heavier for Social Insurance officers and employees.

If in the past, social insurance only needed to be paid through one "contact point" which was the employer, now it requires more transactions, with thousands of workers being paid each time. However, the provincial social insurance affirmed that with the goal of putting the interests of workers first, for social security, the existing problems and difficulties will be gradually resolved.