7 in 10 Informal Workers Lack Knowledge about Employment Policies and Social Insurance

October 18, 201711:55 am1004 views

The latest survey conducted by the Institute of Labour Science and Social Affairs (ILSSA) and the International Labour Organisation (ILO) suggested that majority of informal workers (70 percent) in Vietnam have no knowledge about employment policies, while more than 40 percent freelance workers never heard about voluntary social insurance.

According to the report, among those who did know about voluntary social insurance said that they obtained the information from local authorities (32.3 percent) and friends or acquaintances (18.3 percent). Only few were actually informed by insurance agencies (8.1 percent), Vietnam Net reports.

In Vietnam, the regulations regarding to voluntary social insurance was first adapted in January 2008. The programme aims to provide insurance for workers in informal sector, mainly local farmers and rural employees. However, for the last ten years the regulation has taken place, only 237,000 people have bought voluntary social insurance. Within this number, only few of them actually belong to workers in the informal sector for whom the safety net was initially designed.

Besides, most participants who join voluntary social insurance formerly had compulsory social insurance, and now they moved to voluntary type because they were unable to continue using compulsory social insurance for various reasons.

See: MSF to Run Annual Programme that Introduces Special Students to Various Job Roles

Director of the Centre for Population, Labour and Employment Study under ILSSA Trinh Thu Nga commented that poor communication was responsible for the low rate of voluntary social insurance participation. She said that because people did not know and understand about the programme, so they did not join it.

Ms Nga added that labourers are willing to pay about 400,000 VND a month for insurance, or covering about 7.1 percent of their average income. Therefore, voluntary insurance fee of 154,000 VND per month is actually not an issue, according to her.

Additionally, she also pointed out that voluntary social insurance participants complained that they receive fewer benefits compared to those covered by compulsory insurance. Voluntary social insurance only covers pensions and survivor benefits, while compulsory packages provide wider benefits within various range of scenarios, such as accident and sickness.

At the workshop, ILO recommended that more communication should be initiated to target eligible groups for voluntary social insurance. It added that Vietnam should consider adding more benefits to the package, as well as reducing the number of years paying insurance fees to at least 15 years (the current requirement is at least 20 years).

Vietnam aims to have half of its workforce covered by social insurance by 2020. By the middle of this year, about 13.1 million people already had compulsory and voluntary social insurance, which makes up for 24.5 percent of the workforce.

Read also: Vietnam Should Reinforce Its Migrant Labour Securities: World Bank Report

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