Perfecting the social insurance regime for occupational accidents and diseases in Vietnam

For occupational accidents, the confirmation of occupational accidents and the receipt of occupational accident benefits depends largely on the employer. If the units do not participate in social insurance or the units do not declare occupational accidents, the employees will not be entitled to social insurance benefits. Furthermore, the inspection and examination work of the Department of Labor, War Invalids and Social Affairs is still limited due to the small force. In 2008, the Ministry of Labor, War Invalids and Social Affairs only inspected the implementation of labor laws in 550 enterprises and the Department of Labor, War Invalids and Social Affairs inspected 3,988 enterprises. The number of inspection units only accounts for a small proportion compared to the total number of enterprises and production and business establishments.

For occupational diseases, the detection of occupational diseases depends largely on the organization of periodic health examinations for employees of the unit. According to the report of the Department of Preventive Medicine, Ministry of Health, in 2009, only 13.65% of enterprises reported conducting periodic health examinations for employees. In addition, the number of people detected with occupational diseases also depends on the occupational disease examinations and the number of occupational diseases examined during the year of the provinces/sectors. For example, in 2009, only 20 provinces/sectors examined 10 occupational diseases out of a total of 25 occupational diseases for employees.

b) Organization of payment of occupational accident and disease benefits

* Payment method

Accident and occupational disease benefits, along with retirement and death benefits, are paid to employees by the Social Insurance Agency in a complete, timely and convenient manner. To achieve this, the Vietnam Social Insurance Agency has directed and guided lower-level Social Insurance agencies to flexibly apply payment methods, depending on the conditions of each region and the needs of employees.

There are two payment methods used by the Social Insurance Organization:

First , direct payment method: the Social Insurance agency directly pays the regime to the beneficiaries. Every month, according to a fixed schedule, the staff in charge of payment is responsible for preparing all work related to payment and payment at the local level. This payment method has the following advantages:

- Social insurance officers have the opportunity to directly contact social insurance beneficiaries, promptly answer questions, and disseminate and explain social insurance policies and regimes to social insurance beneficiaries.

- Can promptly grasp the increase and decrease of subjects to make timely adjustments, detect acts of false declaration and misappropriation of social insurance funds.

- Payment work is more strictly managed in terms of both money and payment documents, ensuring fast, neat, correct, complete and direct payment to the recipient.

However, this form also has disadvantages:

- Social insurance beneficiaries must receive benefits on a fixed date;

- Manual money transfers and disbursements are sometimes unsafe and time-consuming;

- For areas with large areas and social insurance beneficiaries living in a decentralized manner, it is difficult to pay social insurance benefits in a timely manner;

- Need a large number of social insurance officers to do payment work.

Second , indirect payment method: is the payment of benefits to beneficiaries through a third party, which can be a payment agent or a banking organization (via ATM card).

For payment through representatives, the Social Insurance agencies of districts and counties sign contracts with payment representatives certified by the People's Committees of communes and wards. Every month, the payment representatives are responsible for going to the Social Insurance agencies of districts and counties to receive the list of beneficiaries and the payment amount to pay the beneficiaries. This method has the following advantages:

- Short payment time, payment plan is guaranteed because it can be carried out simultaneously in all locations at the same time.

- The payment agent is a resident and living in the area, so he/she should grasp the changes of the subject to promptly notify the social insurance agency.

Limit:

- The Social Insurance Agency depends entirely on the payment agents from the stages of: Payment organization, payment settlement, increase and decrease reporting... therefore, the advance payment and settlement of social insurance payment funds do not take place according to the regulations and progress of the Social Insurance Agency.

- Payment documents do not ensure high legality such as: signing on behalf of others, receiving on behalf of others without authorization, loss during the payment process. In addition, some agents make payments not in accordance with the principles, pay less, pay late to the subjects, causing misunderstanding about the State's social insurance policy and the implementation process of social insurance policy of the social insurance agency.

- Beneficiary management depends heavily on payment agents, so social insurance organizations cannot promptly grasp the situation of increase or decrease in beneficiaries.

- Completing accounting forms and books is difficult because payment representatives are not trained or have low responsibility for their work.

For the form of paying social insurance benefits via ATM card, withdrawing money is more flexible and convenient but also has many limitations such as: withdrawing money for the elderly and people with poor eyesight is very difficult; the reduction of social insurance beneficiaries is not timely...

The Social Insurance Organization has combined all three payment methods above, and each locality, depending on actual conditions, will choose the appropriate payment method. Most local Social Insurance agencies make indirect payments because the number of Social Insurance officers is small while the number of beneficiaries is large. The form of payment of benefits through ATMs is widely deployed in cities, towns... with guaranteed infrastructure, but to meet the needs of beneficiaries, the Social Insurance agency allows employees to choose the appropriate payment method.

Regardless of the payment method, for monthly social insurance benefits, the social insurance agency must ensure payment of benefits to employees before the 10th of each month. However, sometimes, due to objective reasons such as bad weather, problems with the authorized bank paying benefits, etc., the timeliness of payment of benefits to employees cannot be guaranteed.

* Payment process

Every month, the Vietnam Social Insurance provides funds for the provincial Social Insurance to pay social insurance benefits, including occupational accident and occupational disease benefits for employees according to regulations. The provincial Social Insurance is allowed to open a "specialized social insurance payment" account at the Bank for Agriculture and Rural Development to receive funds transferred by the Vietnam Social Insurance to pay benefits to beneficiaries from the Social Insurance Fund. The provincial Social Insurance is only allowed to use money in the account to pay for beneficiaries of social insurance benefits. For occupational accident and occupational disease benefits, the provincial Social Insurance pays one-time occupational accident and occupational disease benefits to beneficiaries directly managed by the provincial Social Insurance, and provides funds to the district Social Insurance to have a source of funds to pay for beneficiaries of occupational accident and occupational disease benefits directly managed by the district Social Insurance.

Similar to the provincial Social Insurance, the district Social Insurance opens a "specialized social insurance payment" account to receive funds transferred by the provincial Social Insurance, then organize payments to beneficiaries of occupational accident and disease benefits managed by the district Social Insurance.

District Social Insurance makes monthly payments of occupational accident and occupational disease benefits directly to beneficiaries or through payment representatives at the commune and ward levels or through banks (ATM cards). Beneficiaries are managed and monitored for changes (due to movement or death) and payments are organized according to the district, commune (or ward) area. The requirements for payments to these beneficiaries are that they must be complete, delivered to the beneficiaries and within 3 to 5 days at a fixed time of the month. Payments to beneficiaries are completed

All payments are made in cash, so cash management (during the process of receiving from the Bank, transporting to each ward, commune, and residential group; during payment to each person) is a difficult issue and needs special attention.

In the case of monthly beneficiaries of occupational accident and disease benefits moving (from one commune to another, from one district to another or from one province to another) and the subject dying, the provincial Social Insurance must adjust and make a detailed list of each subject every month, according to the district, ward (or commune), and residential group. The provincial Social Insurance transfers money and the list of subjects entitled to social insurance regimes to the district Social Insurance as a basis for payment to the subject.

c) Payment results

After the injury has been stabilized, the employee will be assessed for the level of reduced working capacity due to work accidents and occupational diseases, which will be the basis for the social insurance agency to pay benefits. For those who have suffered from mild work accidents and occupational diseases (5% - 30% reduction in working capacity), the employee is still able to work to earn an income equivalent to the income level before the work accident or occupational disease, so they will receive a one-time benefit.

Table 2.14: Status of payment of one-time occupational accident and disease allowances in the period 2005-2009

Year

Target

Unit	2005	2006	2007	2008	2009
Number of beneficiaries	People	3,688	3,860	3,517	4,056	3,977
Continuous increase speed	%	-	4.66	-8.89	15.33	-1.95
Amount	Million Dong	7.131	8,601	18,840	31,111	41,227
Continuous increase speed	%		20.6	119.1	65.1	32.5

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Source: Vietnam Social Security

On average, each year, about 3,800 people receive one-time occupational accident and occupational disease benefits with an average annual benefit payment of about 21.4 billion. Although the number of beneficiaries of one-time benefits has not fluctuated much over the years, the payment amount increased sharply in 2007. The reason is that the one-time benefits in 2005 and 2006 were calculated according to the provisions of Decree 12/CP of the Government dated January 26, 1995, according to which the benefit level is calculated according to the group of levels of reduced working capacity and the general minimum wage. In 2007, when the Law on Social Insurance was applied, the level of occupational accident and occupational disease benefits was calculated according to the level of reduced working capacity and the level of social insurance contributions, so the benefit level was much higher than before. On the other hand, due to the increase in the minimum wage, the average benefit level was also higher. In the 5 years from 2005 to 2009, the Government adjusted the general minimum wage 4 times, from 290,000 VND to 350,000 VND in October 2005, from 350,000 VND to 450,000 VND in October 2006, from 450,000 VND to 540,000 VND in January 2008 and from 540,000 VND to 650,000 VND in May 2009.

In addition to those who have suffered from minor occupational accidents and diseases and are entitled to one-time benefits, the Social Insurance Organization must pay monthly benefits to those whose working capacity is reduced by 31-100%. Each year, about 2,300 more people receive monthly occupational accident and disease benefits, bringing the total number of people receiving monthly occupational accident and disease benefits by the end of 2009 to 25,623 people (currently, the Social Insurance Organization still has to pay monthly benefits to two groups of people, one group who retired before January 1, 1995, the source of payment is taken from the State budget, and one group who retired after January 1, 1995, the source of payment is taken from the Social Insurance Fund, and then the Labor Accident and Disease Fund. Within the framework of the thesis, the author only studies the group of people who receive benefits from the Social Insurance Fund, not the group who receive benefits from the State budget) (Table 2.9).

Table 2.15: Monthly payment of occupational accident and disease allowances in the period 2005-2009

Year

Target

2005	2006	2007	2008	2009
New arrivals in the year ( people )	2562	2252	2039	2312	2431
Monthly occupational accident and disease allowance
Number of people	17,361	19,146	21,662	23,520	25,623
- Amount ( million VND )	40,952	54,309	64,939	81,958	126,861
Service allowance
Number of people	262	216	227	213	278
- Amount ( million VND )	767	778	1,226	1,037	1.801
Home page for assisted living facilities - Amount ( million VND )	73	148.5	61	106	168

Source: Vietnam Social Insurance Similar to the one-time subsidy, the total monthly subsidy payment has also increased gradually over the years, in particular, there is a clear difference between 2006 and 2007, the basic reason is due to the change in the way of calculating the subsidy according to the Law on Social Insurance. In addition, the payment amount increased due to the increase in the general minimum wage. The re-regulation of the way of calculating the occupational accident and occupational disease subsidy towards increasing the subsidy level, ensuring the life of workers shows the concern of the Party and the State, the efforts of the social insurance sector. However, the difference in subsidy levels between beneficiaries of occupational accident and occupational disease subsidy in different periods also has a negative impact on the

resolving the regime for workers.

In addition to cases of receiving one-time or monthly occupational accident and disease benefits, there are also cases of workers dying due to occupational accidents and diseases.

Relatives of these subjects, in addition to receiving death benefits according to regulations, are also entitled to a one-time subsidy from the Labor Accident Fund and the Labor Disease Fund. However, the majority of workers who die are due to work-related accidents. The number of people who die from work-related diseases is very small, because those who suffer from work-related diseases must have had a long period of infection. If a worker has been confirmed to have work-related diseases and receives monthly benefits but then dies, he or she will not be entitled to a one-time subsidy. In the past 5 years, there have been no deaths (including deaths during the initial treatment period) due to work-related diseases, only deaths due to work-related accidents. The situation of payment of one-time subsidies for people who die from work-related accidents is as follows:

Table 2.16: Status of one-time allowance payment to relatives of workers who died due to occupational accidents and diseases in the period 2005-2009

Year

Target

2005	2006	2007	2008	2009
Number of deaths due to occupational accidents (people)	615	650	710	664	549
Subsidy amount (million VND)	4.255	5.208	8,707	11,257	10,885

Source: Vietnam Social Insurance According to the Law on Social Insurance, employees who die due to work accidents or occupational diseases and their relatives are entitled to a one-time subsidy equal to 36 months of the general minimum wage. This subsidy level is stipulated in Decree 12/CP dated January 26, 1995 as 24 months of the general minimum wage. Therefore, the subsidy amount in 2007, 2008, and 2009 is higher.

much more than in 2006.

2.3.4.2. Management costs

Currently, management costs are estimated for the entire system according to State regulations. Vietnam Social Security has not allocated management costs to component funds. Management costs are taken from profits earned from fund investment activities. Management costs for the entire system are shown in the following table:

Perfecting the social insurance regime for occupational accidents and diseases in Vietnam - 13

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