china's social welfare
TRANSCRIPT
Madeline Wood HRONE| SUITE 603, ORIENTAL CENTER, 699 WEST NANJING RD/ 31 WUJIANG ROAD, JINGAN DISTRICT, SHANGHAI, CHINA 200041
China’s Social Welfare
Social Welfare: is the system that provides assistance to needy individuals and families
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The five insurances The Pension Fund Medical Insurance Work-Related Injury Insurance Maternity Insurance Unemployment Insurance The Housing Fund
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PensionFund
Disclaimer:MostcitiesinChinaimplementaceiling(orcap)oncontributions.Thecalculationfortheceilingfigureisusuallytheaveragemonthlysocialsalaryoverthepreviousyearforthatcitymultipliedby300percent.Therefore,theactualpercentagecontributionforemployersandemployeesislowerthanthepercentagesindicatedbelowwhentheindividualisaparticularlyhighearner.Generally,thesalaryincreasesaboveRMB12,000,thelowertheeffectivepercentagethatneedstobecontributed.
PleaseseeFigure1:“Pension”.
• SocialInsuranceLawoAllemployees,includingruralmigrantworkers,shouldbecoveredbythesocialinsurance
o SystemoBothemployersandemployeesarerequiredtomakecontributionstoapensionfund,unemploymentinsurancefundandmedicalinsurancefund,aswellastheHousingProvidentFund.Employers,butnotemployees,arealsorequiredtocontributetothework-relatedinjuryandmaternityinsurancefunds.
o Thevariousinsurancefundsaremanagedbylocalgovernmentslabororhumanresourcesand
o Socialinsurancedepartmentsthatmanagethesocialinsurancefunds,whiletheHousingProvidentFundismanagedbythelocalgovernment’sHousingProvidentFundManagementCommittee.
o Thefundscollectedmustonlybeusedforthespecificpurposeintended,namelytheprovisionofsocialinsuranceforworkersandretirees
o Thepensionandmedicalinsurancefundsare
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o Composedofpooledcomponents,whichcanbeusedtobenefitanyeligibleemployeeconcerned,whentheybecomeeligible.
o Socialinsurancebenefitsshouldremainwithworkerswhentheymove.However,thisprovisionhasprovedverydifficulttoimplementbecauseofthehighlylocalizednatureofthesocialwelfaresysteminChina.GettingdifferentjurisdictionstoshareinformationisfraughtwithbureaucraticandtechnicaldifficultiesespeciallyforworkerscomingfromruralareasofChina.
• Workers’contributionsarepaidintoapersonalaccount
• Uponretirementthebalanceoftheaccountincludinginterestisdivideinto120instalmentstobepaidoutmonthlyoveraten-yearperiod
• Workersareeligibleforpensionswhentheyreachthestatutoryretirement
• Bothemployeesandemployersarerequiredtomakepaymentstothebasicmedicalinsurancescheme,whichcombinesanindividualaccountwithpooledfunds
• Amountsvaryfromregiontoregion
• Typically,workerscontributetwopercentoftheirindividualwages
• SocialInsuranceLawstatesthatmedicalinsurancefundshouldcoverworkers’medicalcostsbypayingserviceprovidersdirectlyoMostcases,workershavetopayup-frontandrequestreimbursementfromauthoritieslater
• Tobeeligibleforpublicinsurancefunds,hospitaltreatmentsmustbeona
Preapprovedgovernmentlisto Treatmentsoutsideofpre-approvedlistmustbepaidoutofeithertheworker’sindividualaccountortheirownpocket
MedicalInsurance
Work-RelatedInjuryInsurance
• Employersmustmakethecontributions,butinabsenceofsuchcontributionstheemployeecanstillclaimtherelevanttreatmentexpense
• Theadministrativeagencyisobligatedtoforcetheemployertopayforthecostofthetreatmentandoutstandingworkinjuryinsurancecontributions
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Compensationiftheycanprovetheyhaveanemploymentrelationshipwiththeiremployerandthattheinjurysustainedisinfactwork-related• Employeesarenot
Preapprovedgovernmentlisto Treatmentsoutsideofpre-approvedlistmustbepaidoutofeithertheworker’sindividualaccountortheirownpocket
Work-RelatedInjuryInsurance
Requiredtocontributetothematernityinsurancefund,whileemployersmakecontributionsatratesdeterminedbyindividuallocalgovernments
• Maternityinsurancecoversallmaternity-relatedmedicalcosts,
• Paidsolelybytheemployeratratesbetween.5percentandtwopercentofpayrolloVariesaccordingtothehealthandsafetyrisksofspecificindustriesandlocations
• Workersareeligibleforwork-relatedinjury
MaternityInsurance
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Includingbirthcontrol,prenatalcheck-ups,deliveryandantenatalcare,aswellasallowancestobepaidduringmaternityleave
Alivingwage• Manylocalauthoritiesaddresstheissuebyprovidingmigrantworkerswithaone-timepaymentamountingtomuchlessthantowhichtheyarelegallyentitled
TheHousingProvidentFundisnotofficiallypart
ofChina’ssocialinsurancesystem.
• Contributorstothehousingfundcanapplyforpreferentialratemortgages,coverhousingrepairandmaintenancecostsandgetrentsubsidies
• Determinedbylocalgovernment,butcannotbelowerthanfivepercentoftheaveragewageattheenterprise
UnemploymentInsurance
• Employerhasobligationontheemployertoprovidethe“terminationofemployment”evidencetotheemployeewithin15daysofhisorherreleasefromthecompany
• RegulationsonUnemploymentInsurance
• BothworkersandtheiremployerspayintotheunemploymentinsurancethatwaslargelyaffirmedbytheSocialInsuranceLaw
• Manyprovincialandmunicipalgovernmentshavenowsubstantiallycutcontributionratesasameansofreducingcostsforbusinesses
• Basedonsalary• Benefitspaidareverylow
• Unemploymentbenefitsmustbelowerthanthelocalminimumwage,whichisalreadysetataverylowlevelandcaninnowaybeconsidered
• AdministeredbytheMinistryofHousingandUrban-RuralDevelopment
• Oftengroupedwiththefivesocialinsuranceprogramssinceithasasimilarfunction
www.clb.org.hk/content/china’s-social-security-systemwww.investopedia.com/terms/s/social-welfare-system.aspwww.china-briefing.com/news/2012/02/21/mandatory-social-welfare-benefits-for-