VietNamNet Bridge – Businesses that evade paying social insurance premiums for workers should be punished more harshly, the deputy general-director of Viet Nam Social Insurance, Do Van Sinh, said at a meeting on Wednesday.

Patients queue up at HCM City's Cho Ray Hospital. Firms evading social insurance payments should be punished harshly, or the problem can get out of hand, officials say.

Enterprises owing social insurance premiums and medical insurance have been multiplying in every locality and sector, especially private firms and household businesses, Sinh said.

According to the Ministry of Labour, Invalids and Social Affairs, about 16 million workers should have mandatory social insurance. However, only 11 million workers have registered to join the compulsory social insurance scheme.

The Viet Nam Chamber of Industry and Commerce estimates that as many as 150,000 firms are currently behind in paying social insurance premiums for their workers. And social and medical insurance debt has grown to VND11.5 trillion (US$542 million), as of August's end.

"If we don't toughen our policies, it will be very difficult to attain the goal of having more than 50 per cent of the labor force covered by social insurance by 2020," Sinh said. "Slower economic growth and production is also playing a part in businesses delaying paying social insurance or avoid paying them completely."

Some of the policy barriers had to do with social insurance interest rate levied on businesses delaying paying social security is much lower than the bank's interest rate, thus tempting businesses to use social insurance money to invest in other matters, Sinh said.

Social insurance authorities aren't allowed to fine violating firms, and lax inspection policies make it difficult to collect outstanding debts, he said. The Criminal Code does not include evasion of social and medical insurance payment, so criminal prosecution is not permitted in such cases.

Nguyen Thien Nhan, chairman of the Viet Nam Fatherland Front, noted during the meeting that despite some progress, about 34 million workers still lack any form of social insurance protection, and about 27 million people lack health insurance.

The number of people under the voluntarily social insurance scheme has been particularly low, reaching only about 173,600 by the end of 2013.

Outside the Government and Party's efforts, social organizations play a key role in enhancing workers' and employers' awareness of the benefits of social insurance, Nhan said.

Mai Duc Chinh, deputy chairman of the Viet Nam Labour Federation, said the country must increase coordination among trade unions, the Government and social insurance offices at all levels. Trade unions, he said, must step up to protect workers, as the upcoming draft Law on Social Insurance would allow trade unions to sue businesses that evade paying social insurance.

Deputy Prime Minister Vu Van Ninh noted that government policies on social insurance and health insurance have gradually been adjusted, but more must be done, as many citizens still do not have insurance.

The Government is committed to do more to encourage businesses and workers and individuals to join voluntary social insurance scheme and increase punishment level for businesses that evade paying social insurance, he said.

Sinh of Viet Nam Social Insurance said the agency would expand efforts to file lawsuits against violating firms and release their names to the media.

The Viet Nam Social Security Fund could experience deficits by 2021 and run out of funds by 2034, according to the International Labour Organisation.

Viet Nam is still currently working to amend its social insurance law, which first came into effect in 2007.

VNS/VNN