Unpaid social insurance fees skyrocket

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Vietnam Social Security statistics show that offenders were spread throughout the nation.

By the end of February 2013, unpaid health and social insurance fees owed by business entities and organisations amounted to VND10.4 trillion ($495 million). Of this, unpaid health insurance fees surpassed VND2.6 trillion ($123.8 million).

Despite many localities applying strong measures towards big debtors, unpaid amounts continued to surge. By this time, over 50 per cent of social insurance branches incur debt amounts higher than the country’s average level, leading to serious imbalance in the fund collection and expenditure activities.

Statistics show that in the first two months of 2013, paid social insurance fees came to around VND16 trillion ($761 million) versus over VND23.8 trillion ($1.1 billion) in total expenditure.

Hanoi Social Security director Nguyen Thi Phuong Mai attributed continuing economic difficulties to a sharp hike in unpaid social and health insurance fee amounts.

In 2012, around 600 Ho Chi Minh City based businesses owing big social insurance fee amounts were brought to court, accounting for more than 80 per cent of total firms facing lawsuits for the same reason.

However, the big stick had little impact as reclaimed amounts in Ho Chi Minh City just made up 28 per cent of due-to-be paid amounts though strong measures were taken. Similarly, the rate of reclaimed debts was a bit more than 30 per cent in Ha Tinh province.

“Hanoi, like a number of other localities, saw several thousand firms facing dissolutions or retrenched production. May firms found it hard to pay their workers salaries, let alone social or health insurance fees,” said Mai.

Scores of firms with stable operations, however, were found to have delayed  payment obligations, whereas every month they deducted insurance fee from their employees’ salary. Meanwhile, top administrative fine level to such illegal capital appropriation is only VND30 million ($1,400) which was considered not strong enough to keep firms from reiteration.

Social insurance bodies have proposed considering such illegal capital appropriation a criminal case to avert violations, but their proposal has yet to be accepted.

Compared to the end of 2012, unpaid social and health insurance fees jumped around VND5 trillion ($238 million), and it rose around 80 per cent compared to the same period last year.

Hanoi and Ho Chi Minh City reported highest unpaid amount rates of 8.2 and 8.9 per cent, respectively.

Northern mountainous province Dien Bien was the only location surpassed these fees collection plans in the first two months of 2013.