Can unemployed workers use their social insurance books for consumer loans?

According to a survey by Committee IV of more than 8,300 workers at the end of April, 31% of those surveyed were unemployed.

This rate has decreased compared to the Covid-19 pandemic (62% in August 2021 and 53% in October 2021), but is still quite high. Board IV believes that the context is challenging for the labor market.

By main economic sector, real estate, construction, tourism, hotels and restaurants have the highest rates of unemployment, at 53%, 44% and 43% respectively.

By locality, Ho Chi Minh City, Dong Nai, Binh Duong and Da Nang are the localities with the highest unemployment rate, all over 30%.

Regarding the reasons for unemployment, the survey showed that 32.4% of unemployed workers said they lost their jobs because their production and business establishments closed, went bankrupt or temporarily suspended operations; 27.1% gave the reason because their production and business establishments had to lay off workers to cut costs due to lack of orders.

Panel IV forecasts continued job losses in the remaining quarters of 2023.

Regarding the one-time withdrawal of social insurance, 14% of the employees participating in the survey had withdrawn social insurance at one time. Of these, 61% said the reason was because they did not have savings or other sources to compensate for the loss of income when unemployed, while 14% were worried about the stability of the social insurance policy.

When asked about the possibility of closing social insurance, 48% of workers who had withdrawn social insurance said they did not want to close it again.

Support businesses and workers

To create jobs for workers in the current challenging context, according to Committee IV, the most important thing is to support businesses to maintain and restore production and business activities.

It is necessary to provide support solutions for businesses, thereby indirectly supporting workers. Specifically: Extending the period of value-added tax reduction; extending, postponing, reducing fees related to social insurance, trade union funds, or considering new personal income tax rates to suit the new context.

Most workers in difficulty have to withdraw their social insurance at one time (Illustration photo)

In addition, continue to reduce bank interest rates and policies on debt extension, deferral, and forgiveness while considering preferential loans such as loans for businesses to pay salaries for employees or to train, foster, improve skills, and retain employees...

Regarding the issue of social insurance and one-time withdrawal of social insurance, the survey results show that this trend has not stopped as workers are still at very high risk of losing their jobs in the second half of 2023 and most of them have little financial resources to maintain their immediate lives.

To support workers and at the same time reduce the situation of withdrawing social insurance at one time, Committee IV recommends that the Government direct the Ministry of Labor, Invalids and Social Affairs, Vietnam Social Security and other research agencies to allow workers to use social insurance books for short-term consumer loans in the context of reduced income or unstable employment.

Allow businesses and employees to not have to collect and pay union fees to the higher-level union agency until at least the end of 2024 and defer other taxes and fees so that businesses and employees can focus this resource on employees to directly cover their living needs, in order to reduce pressure/expectations on the amount withdrawn from social insurance.

According to an expert in the field of labor and employment, in the context of workers facing difficulties, losing their jobs, or reducing their jobs, it is necessary to allow workers to use their social insurance books as collateral for spending credit loans. This helps limit workers from withdrawing their social insurance at one time, and repels the situation of mortgaging their social insurance books to borrow black credit from outside.

Maintain the regulations on the basis of social insurance contributions

Regarding the basis for calculating social insurance contributions in the draft revised Law on Social Insurance, it is proposed to maintain the current regulations on the basis for calculating social insurance contributions, combined with establishing other effective management measures to ensure the comprehensive goals of the policy while reducing the pressure on contribution costs for both employees and businesses in the context of facing many challenges and difficulties.

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