Receiving social insurance money in one lump sum: immediate benefits, long-term burden

According to policy researchers, the increase in the number of workers who have participated in social insurance and receive one-time social insurance benefits is a major challenge in realizing the goal of expanding social insurance as well as ensuring social security. Receiving one-time social insurance means leaving the social insurance system, depriving oneself of the right to participate in and enjoy the regimes of sickness, maternity, retirement, and death.

Lack of interest in pensions

According to Mr. Dao Viet Anh, Deputy General Director of Vietnam Social Security, in the past 5 years, there have been about 2.5 million workers nationwide receiving one-time social insurance payments. This situation does not tend to decrease but is increasing. It is estimated that in 2017, about 700,000 workers received one-time social insurance payments, and in 2016, this number was similar. Workers tend to prefer to receive "a lump sum" rather than persistently paying social insurance to the end to be eligible for pension.

The number of workers receiving one-time social insurance benefits has been increasing in recent years.

Among them are many workers over 35 years old in leather and footwear and garment enterprises, who lost their jobs and received social insurance in one lump sum. In industrial zones, there are cases where workers accept to leave early to receive a large sum of money in one lump sum without waiting for their pension. Ms. Le Thi Hong (45 years old, working in Nam Thang Long Industrial Park - Hanoi) shared: Because I wanted to return to my hometown with my family, I accepted to withdraw my insurance early and receive it in one lump sum to have money to return home to do business.

Commenting on this situation, Mr. Bui Sy Loi, Vice Chairman of the National Assembly's Committee on Social Affairs, said that workers need to be aware that the time of paying social insurance is the process of accumulating "savings" for themselves when they retire. If they receive social insurance at one time when they are young, when they get old, their health declines and they are no longer able to work, they will be left empty-handed and will not receive pensions and accompanying social security regimes (when they retire, in addition to their pensions, workers will also be given a health insurance card; when workers die, their relatives will receive funeral benefits and monthly death benefits or a one-time death benefit).

“If we compare receiving monthly pension and receiving one-time social insurance benefits for the same period of social insurance contribution, the total monetary benefit when receiving monthly pension will be many times higher. Therefore, workers need to be alert and consider carefully before deciding,” Mr. Bui Sy Loi affirmed.

In the social security system, the social insurance system plays the most stable and pillar role. The nature of social insurance is to ensure partial compensation or replacement of workers' income when they lose or reduce their income due to illness, maternity, work-related accidents, occupational diseases, unemployment, retirement age or death based on contributions to the social insurance fund. Therefore, there is no reason why when young, still able to work, still have the opportunity to work to cover their living expenses, workers should receive social insurance at one time - spending in advance the part saved for when they are sick, ill, or no longer able to work when they are old.

Further analyzing the benefits of persistently accumulating social insurance instead of enjoying "early retirement", Vice Chairman of the National Assembly's Committee on Social Affairs Bui Sy Loi emphasized: People and workers can be completely assured of the Social Insurance Fund managed and protected by the State. Because if when they retire, the value of money loses value due to inflation, the State must increase the salary for retirees. Specifically, in 2018, the State adjusted to increase the pension for workers by 7%.

Policy amendments to increase benefits

Proposing a solution to limit the increasing number of people receiving one-time social insurance benefits, which makes the social insurance contribution less meaningful and affects the balance of the Fund, Le Dinh Quang, Deputy Head of the Labor Relations Department (Vietnam General Confederation of Labor), said that the State management agency needs to study and calculate the regulation that when employees receive one-time benefits, they will only receive the part paid by the employee, and the part paid by the State or the employer will not be received. This will limit the number of employees who apply for one-time social insurance benefits.

In addition, the social insurance policy must be amended in a more attractive way, creating more benefits for workers, especially pensions. For a long time, many workers felt that the law was amended in a way that was disadvantageous to workers, so they tended to receive one-time benefits.

Looking at this issue from the perspective of labor and employment, Deputy Minister of Labor, War Invalids and Social Affairs (MOLISA) Doan Mau Diep said that Resolution No. 28-NQ/TW recently passed by the Party Central Committee also mentioned a number of solutions such as strengthening macroeconomic solutions to create stability in the business environment, employment and income for workers. This is considered the most fundamental solution to help maintain employment, stabilize income and the ability to contribute of workers.

In the past 5 years, there have been about 2.5 million workers nationwide receiving one-time social insurance payments. This situation does not show any signs of decreasing but is increasing.

In addition, solutions should be implemented to encourage employees to choose to reserve their time to participate in social insurance when terminating their labor contracts by amending policies to increase benefits if they reserve time and reduce benefits if they receive social insurance in one lump sum. For example, when receiving social insurance in one lump sum, employees will only receive their own contribution (8%), and will not receive the part paid by agencies, organizations, or enterprises.

On the other hand, to expand social insurance coverage, it is necessary to combine other solutions synchronously, such as studying and amending unemployment insurance policies towards focusing on preventive solutions, supporting businesses to maintain production, ensuring employment instead of only focusing on solutions to deal with consequences such as paying unemployment benefits.

In addition, as an advisory body, the Ministry of Labor, Invalids and Social Affairs has also considered a number of policies such as being able to partially support salaries and support social insurance contributions for workers at risk of being laid off and who will have difficulty finding jobs in businesses that are really struggling. Thanks to that, workers still have jobs, are still in the social insurance system, still make products or provide services, and still contribute to national growth and labor productivity.