A recent study conducted by Oxfam's partners has revealed a concerning reality: a staggering 58% of workers confess to having no savings whatsoever. The remaining workers who do manage to save are forced to adopt a frugal lifestyle just to create a safety net for themselves. Unfortunately, borrowing money has become a regular occurrence for many individuals.
When faced with financial strains, workers often resort to a one-time withdrawal from their social insurance. These withdrawals are primarily utilized to cover basic living expenses, such as education for their children, medical bills, or even childbirth-related costs.
The prevalent practice of workers resorting to social insurance withdrawals represents a formidable challenge in the quest for universal social security. It directly impacts the well-being of employees and raises serious concerns about their welfare.
Ms. Nguyen Thu Huong, Senior Programme Manager - Governance at Oxfam in Vietnam, emphasized the critical importance of carefully considering any proposal aimed at reducing the benefits associated with one-time social insurance withdrawals. She cautioned that such a move would inflict significant harm upon workers, particularly those who are already impoverished. Moreover, it would further diminish the attractiveness of the social insurance policy as a whole.
To address the issue, several proposals have been put forth to restrict the frequency of one-time social insurance withdrawals:
1. Adjusting the minimum wage to reflect a living wage, enabling workers to cover their living expenses without resorting to social insurance withdrawals.
2. Reducing or eliminating the minimum number of years of payment required to qualify for retirement benefits.
3. Increasing insurance benefits to provide more substantial support to workers.
4. Establishing appropriate payment and benefit levels that allow workers to choose based on their income conditions.
5. Enhancing the adjustment of monthly income for which compulsory social insurance contributions have been made, ensuring its purchasing power remains in line with inflationary impacts.
These proposals aim to mitigate the need for workers to tap into their social insurance funds, ensuring greater financial security and overall well-being.