Withdrawing social insurance at once - "the benefits do not outweigh the disadvantages"

BBK - The number of workers in Bac Kan applying for a lump-sum social insurance withdrawal is increasing for various reasons. People withdrawing from the social security network is a concerning issue today.

Officials from the Social Insurance agency are disseminating information about insurance policies to each household.

In mid-2021, the severe COVID-19 outbreak caused Ms. LHT, residing in Song Cau ward, Bac Kan city, to lose her job because her company in Ho Chi Minh City was in decline and had to lay off employees. Returning to Bac Kan, she continued paying social insurance contributions and hoped to find a job or wait for her old company to call her back, but to no avail. Her savings only lasted a little over a year. Meanwhile, living expenses, caring for her elderly parents, and her children's education were quite costly. With no other options, Ms. T. decided to stop paying social insurance contributions and apply for a lump-sum benefit after nearly 20 years of contributions. She invested the money in trading and running a market stall…

Mr. D.DH, residing in Ba Be district, withdrew his lump-sum benefit for a different reason. Having contributed to social insurance for 18 years, he was diagnosed with liver and kidney disease at the end of 2021. With high medical costs and declining health, Mr. H. decided to withdraw his social insurance benefits in a lump sum. “I’m not sure if my health will last until I receive my pension. So I’ll just withdraw it all at once, put it in the bank to earn some interest, and use it to raise livestock at home to help with my treatment,” Mr. H. explained.

The reasons for the two cases above are quite common for those who decide to withdraw their social insurance contributions in a lump sum. Since 2021, there has been a large influx of workers returning to Bac Kan from other provinces and cities due to the impact of Covid-19.

According to statistics from the provincial Social Insurance agency, in 2021, the number of people receiving a lump-sum social insurance payment was 2,421. In 2022, the agency processed lump-sum social insurance benefits for 3,106 people. In the first six months of 2023, this number was 2,418, an increase of 564 compared to the same period in 2022. The number of new participants in social insurance contributions is insufficient to compensate for the number of people who have stopped contributing and are requesting to withdraw their lump-sum benefits. This is creating many negative consequences and challenges for social security.

According to Ms. Nong Thi Thuy, Deputy Director of the Provincial Social Insurance Agency: Workers should carefully consider before deciding to apply for a lump-sum social insurance payment for the following reasons: Firstly, the amount received in a lump-sum payment is less than the amount of social insurance contributions made. The higher the monthly contribution, the greater the loss when withdrawing the money. Secondly, the period of social insurance contributions used to calculate the lump-sum payment will not be counted towards the basis for calculating other social insurance benefits. Thirdly, receiving a lump-sum payment means no longer being part of the state-protected social insurance system. Those who withdraw their social insurance in a lump sum will lose the opportunity to receive a monthly pension upon retirement, or if they are eligible, the pension amount will be lower due to the deduction of the period of social insurance contributions for which the lump-sum payment was received.

In particular, for those with health problems, withdrawing social insurance in a lump sum will result in the loss of the opportunity to receive a free health insurance card for the entire duration of their pension to cover healthcare expenses. Furthermore, dependents will not be entitled to funeral benefits and survivor benefits if the recipient of the lump-sum social insurance payment unfortunately passes away.

Workers who receive a pension will have more benefits compared to choosing to receive a lump-sum social insurance payment. Receiving a lump-sum social insurance payment means that the worker is removed from the social insurance system and deprives themselves of their basic social security rights.

Recently, when we met again, Ms. LHT couldn't hide her worries: "Things haven't gone as smoothly as I initially planned. Several shipments were damaged by unfavorable weather, causing a loss of capital. At this rate, when I spend all the money I received from the lump-sum social insurance withdrawal, I don't know what will happen to my family. If I had known it would turn out like this, I would have persevered in finding a job and continuing to pay social insurance contributions; I would have been much more secure in my old age..."

In the case of Mr. D.DH, after a period of intensive treatment at a central hospital, he has now recovered. His health has been restored, and he has returned to work and resumed social insurance, but his previous social insurance contributions are no longer counted because he has already received a lump sum payment... "It's a pity, but there's nothing I can do about it...", Mr. H shared.

From the above stories, workers need to carefully consider the "gains" and "losses" when receiving a lump-sum social insurance payment, avoiding short-term gains that lead to long-term disadvantages. The Social Insurance sector advises: If you are temporarily facing difficulties, preserve your participation period; upon returning to the labor market, you can continue participating in mandatory social insurance or continue contributing to voluntary social insurance to have the opportunity to receive retirement benefits.

Source link: https://baobackan.com.vn/rut-bao-hiem-xa-hoi-mot-lan-loi-bat-cap-hai-post53771.html