More assistance necessary for disadvantaged groups

Money is being put aside so that, next year, funds can be used for more pandemic prevention and control measures, including treatment and zoning aspects

Truong Thi Thuy, a Muong ethnic minority woman currently working at a construction site in the northern province of Quang Ninh, has just received cash support of VND1.5 million ($65) through a support package worth VND26 trillion ($1.13 billion) under Resolution No.68/NQ-CP released on July introducing some policies to support employees and employers in difficulty due to the COVID-19 pandemic.

Thuy said that each freelance worker whose job is affected by COVID-19 like her would receive the one-time pandemic support. However, the current wave is longer and more serious than any before it, destabilising her job and income prospects.

“My income decreased by one-third, but living expenses like electricity, water, and meals all increased because I was mostly at home during social distancing,” she said.

Thuy is still one of the lucky ones who received the support early on. Many of her friends who are also eligible are still waiting, while others could not submit all documents required – and others could not return to their hometowns to pick up their due.

Inappropriate support policies

Pham Minh Thu, a researcher of the Institute of Labour Science and Social Affairs under the Ministry of Labour, Invalids, and Social Affairs said that the cash support for employees who lost their jobs or had to temporarily suspend work accounted for only 9 per cent of the $1.13 billion support package.

Indeed, the entire package is less than half of the $2.7 billion support package released in 2020 as per Resolution No.42/NQ-CP on assistance for people affected by COVID-19. A one-off payment of $65 also cannot cover minimum living expenses in a city and is even lower than the current poverty line in urban areas defined at the monthly income of just under $90 per person.

Meanwhile, the level of support for employees with work contracts (received in the form of social insurance allowance) is also lower than the minimum salary of $143-161 in some cases, Thu said.

The cash support in 2021 is mainly focused on stimulating suspending and reducing social insurance premiums. At the same time, the 2021 policy largely ignored disadvantaged groups such as poor households, near-poor households, those in social protection and instead defines a number of specific groups such as tour guides and artists, which does not fully reflect the impact of the ongoing coronavirus pandemic.

“This can create inequalities and does not support the goal of leaving no one behind,” Thu commented.

She added that the regulation that makes only one type of policy support available for each person will not expire until the end of 2021. Issued at a time when it was impossible to forecast the true impact and duration of the pandemic, this policy will make all further efforts ineffective.

According to a survey of almost 1,800 people with disabilities by the Action to the Community Development Center, the average number of working days for this group has halved since COVID-19.

This is the reason why 47.9 per cent of families with disabled people have had to reduce their living expenses by one-third, 56.4 per cent had to cut spending on food, 39.3 per cent have to use less electricity and water, and 15 per cent had to cut medical expenses.

In addition, 21.6 per cent of families have had to tap into their savings and 18.4 per cent had to borrow from relatives. Only 20 per cent of people with disabilities receive allowances or other financial support such as tax payment extension, tax reduction, loans with lower interest rates.

The extent of support in 2022

In order to help people overcome the lasting impacts of the pandemic, many experts proposed that the government increase support packages.

Nguyen Thu Huong, senior programme manager of Oxfam Vietnam, said, “Vietnam should allocate a minimum budget for social security, maybe from 6-10 per cent of GDP, and increase state budget spending on voluntary social insurance policies to give freelance workers the same benefits as compulsory social insurance beneficiaries.”

The Institute of Labour Science and Social Affairs also proposed the government increase cash support for people to 4-5 per cent of quarterly GDP in the short term, targeting households with children, the elderly, and people with disabilities.

The institute proposed that the level of cash support should reach the minimum standard of living with reference to the poverty line set by the government. The time of cash assistance should also correspond to the time of quarantine or social distancing. This policy should be implemented early to prepare for further COVID-19 waves in 2022.

Nguyen Minh Tan, deputy head of the state budget department under the Ministry of Finance, explained that the 2021 support package was smaller due to budgetary restraints and the actual conditions.

“Given the available resources, direct cash support measures are useful, but indirect support is also essential, even more important. Indirect support helps restore the economy, support enterprises to develop and expand production and business, thereby attracting workers to return to work for a stable and better income,” Tan explained.

He said the 2022 budget is expected to increase spending by about $435 million for pandemic prevention and control. The funds will be used for purchasing, researching, producing vaccines and developing medicines to fight COVID-19, reducing spending on treatment, and zoning and suppression activities.

Regarding social security, Tan added, the country’s management agencies will adjust social security policies for social protection beneficiaries by increasing the support budget by around $215-260 million. Support policies for people with meritorious services will also be added.

Part of these funds will be used to increase pensions for those who retired before 1995 and to adjust the poverty line as outlined by the government. “These policies will support people in difficulties in 2022,” Tan affirmed.