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Social insurance policies in Vietnam have received a lot of debate and opinions in these couple of weeks, whether it is the reduction of the minimum year of social insurance contributions or the proposal to reserve the time of payment of social insurance contributions when withdrawing lump-sum social insurance in Vietnam.
According to the current law on Social Insurance, the employee who decides to withdraw lump-sum social insurance will not be able to reserve the years that they have participated in the system.
This means that if the employee has participated for 15 years and needs a huge amount of money to pay hospital bills for their families, they would have to start all over again at year 1.
They would have to pay at least 10 years before being able to pay the remaining minimum 10 years at once, provide that they have reached the retirement age.
This regulation is too harsh. The employees who have settled their business and want to participate in the system again will feel that the system is too conservative and rigid with no thoughts about the employee’s situation.
Consequently, most, if not all the people who decide to withdraw won’t ever come back to the system again.
Change in the lump-sum social insurance policy
Realizing that the regulation is too conservative, the Ministry of Labour, Invalids, and Social Affairs have submitted a proposal to reserve the payment period after withdrawing lump-sum social insurance to be considered and included in the draft amendment of the Law on Social Insurance.
According to a survey, most employees who take lump-sum withdrawal are the employees who have paid less than 10 years in the system.
Accordingly, from their point of view, losing all of those years will be too much and the thinking will spread further, to a point that may affect the entire society, or at least, the people with the same idea of withdrawing lump-sum social insurance.
Although the content of the amendment to the Law on Social Insurance this time does not propose this content, this is also an issue that the drafting board is considering carefully.
However, if it is implemented, there should also be regulations to limit the withdrawal and payment such as regulation of a certain period of time after withdrawing the one-time social insurance to be allowed to reserve.
There should be a fixed period of time in which the withdrawers are allowed to come back to the system. The waiting can not be indefinite. If it is permanent and there are no regulations to restrict the withdrawal, the employees might abuse the system.
ASL LAW is the top-tier Vietnam law firm for Employment and Labor Law. If you need any advice, please contact us for further information or collaboration.
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