Why do young workers rush for one-time social insurance withdrawal?

Employees receive one-time social insurance at Cu Chi district social insurance agency. Photo: Pham Thu

Age pressure

After quitting to receive unemployment insurance benefits for a year, Tran Dinh Thien, 41, a mechanical engineer living in Binh Thanh district, decided to apply for one-time social insurance despite having participated in social insurance for 15 years to cover immediate life needs while not yet applying for a new job.

Similarly, present at the social insurance agency of Thu Duc city, Hoang Lam Giang, a leather and footwear worker, said: “This year I am 37 years old, working as a worker and participating in social insurance for more than 17 years with an income of about VND11 million/month. Last year, because of the Covid-19 pandemic, the company let workers go. After being unemployed, I was also looking for a job to do part-time, making a little money to spend, but it is very difficult to find a stable job. Currently, my family of four depends on my husband's meager salary and my unemployment insurance allowance is not enough. Therefore, I decided to withdraw the social insurance I have been involved for many years to support my family.”

According to statistics of Vietnam Social Insurance, in the 2014 - 2020 period, the social insurance agency has settled to pay about 4.5 million people receiving social insurance.

On average, each year more than 600,000 people enjoy social insurance once, equivalent to the number of new participants every year.

In particular, in some localities with a large number of workers, in 2020, due to the Covid-19 pandemic, the number of people registered for one-time social insurance benefits tended to increase. For example, if in 2019, the Ho Chi Minh City Social Security resolved 96,399 dossiers for one-time social insurance payments, in 2020 it would be for 111,742 beneficiaries, an increase of 15,343 people.

Notably, people with more than 10 years of social insurance payment register for one-time social insurance payment and their age is also younger.

Phan Van Men, Director of Ho Chi Minh City Social Insurance, said that in 2015, there were only 8,275 profiles of people with more than 10 years of participation in social insurance registering for one-time social insurance payment (accounting for 11% of the total number of dossiers for one-time social insurance benefits) it will increase to 24,915 records by 2020 (22.3%). The average age of a one-time social insurance beneficiary in 2015 is 39.9 years old, by 2020 it will only be 35.4 years old.

In addition, in 2020, due to the influence of the Covid-19 pandemic, many workers lost their jobs and their lives were in difficult situations. However, in order to enjoy one-time social insurance, the employee has to wait after a year of leave. Taking advantage of this situation, many people presented tricks of buying and selling, pledging social insurance books in the form of authorizing to receive one-time replacement of social insurance. This behavior not only makes employees lose their benefits, but also increases the status of receiving one-time social insurance quickly.

Disadvantage of rights

According to current regulations, the condition for employees to enjoy one-time social insurance benefits is that after a year of leave, less than 20 years of paying social insurance and not continuing to pay social insurance within those 12 months.

Meanwhile, the change of policy on pension rates and the yearly schedule of increasing retirement age for both men and women makes young workers feel that the age eligibility for pension entitlement is difficult. Therefore, in many cases, the employee has more than 19 years of participation in social insurance, even has paid social insurance for 19 years and 11 months, but still decided to quit his job to be eligible for one-time social insurance.

However, there are also many cases where, instead of quickly looking for a new job to both earn income and continue to participate in social insurance, ensuring long-term security, they find another way to receive benefits. Times to satisfy immediate consumption needs, will continue to work after spending all the money. Even many people who have worked, they have agreed with their units that have not yet paid social insurance yet but wait a few more months until the employee receives the one-off benefit before completing a new dossier.

However, withdrawing social insurance once, the employee will suffer many disadvantages in terms of benefits such as no longer being in the social insurance system organized, implemented and protected by the state; at the same time, the employee loses the opportunity to enjoy his pension - a stable source of income in old age. The amount received is less than the amount paid to the social insurance fund as well as losing money on death, greatly affecting the social security system.

To limit the one-time social insurance, to help employees not leave the safety net, Phan Van Men, Director of Ho Chi Minh City Social Insurance, said that it is necessary to focus on communication so that policies and regulations related to social insurance are closer to the workers. From there, contributing to helping employees to be aware of and have a correct and comprehensive view of the social security policies that the State wants to aim for and bring to the people through policies and regimes on social insurance.

In addition, it is necessary to adjust a number of related policies such as there should be a regulation to gradually increase the time to enjoy one-time social insurance benefits after resignation according to the schedule; add entitlements to increase the attractiveness of voluntary social insurance.

In the conditions to enjoy one-time social insurance, it is necessary to consider removing the provision on the condition of not being able to self-service for employees suffering from life-threatening diseases, or having reduced health of 81% or more, creating favorable conditions for participants to enjoy one-time social insurance payment.