Second Bailout: Right Beneficiaries, Simplified Procedures Expected

9:16:40 AM | 6/25/2021

The Ministry of Labor, Invalids and Social Affairs is studying continued support policies for workers and enterprises affected by COVID-19 pandemic and proposing it to the Government.

A support policy should be launched soon and distributed to beneficiaries with streamlined procedures to cope with the fourth serious COVID-19 outbreak from the end of April, according to experts and enterprises.

First package supports fewer than expected

The Ministry of Labor, Invalids and Social Affairs recently reported the implementation result of Resolution 42/NQ-CP and Resolution 154/NQ-CP of the Government on support for people affected by the COVID-19 pandemic. According to the ministry, the initially planned support package was nearly VND62 trillion.

To date, direct cash support according to Resolution 42 and unemployment insurance policies reached over 14.4 million people affected by the COVID-19 pandemic. The total value was over VND32,694 billion.

Beneficiaries included 11.9 million people with meritorious services, socially protected people, poor households and near-poor households; over 1.316 million workers with employment contracts; over one million workers without employment contracts and over 37,300 business households.

The support also reached 245 employers in need of money to pay wages for 11,276 layoffs as of January 31, 2021, according to the report of the State Bank of Vietnam (SBV) and the Vietnam Bank for Social Policies (VBSP). The value was VND41.82 billion.

At the same time, payment to retirement and survivorship funds was suspended for 1,846 units/enterprises with 192,503 workers. The total amount of temporarily suspended payment to the retirement and survivorship fund was over VND786 billion.

According to the Ministry of Labor, Invalids and Social Affairs, the implementation of basic support policies ensured the principle of supporting those with income reduction, underemployment and unemployment.

However, the ministry acknowledged that some localities were slow to carry out support for workers, especially those without employment contracts, and the support rate was lower than expected. The temporary suspension of payment to retirement and survivorship funds was slowly applied to businesses.

Right beneficiaries, streamlined procedures

The ministry said that the implementation result was not as high as expected because the bailout policy was recommended and launched in the context of a complicated COVID-19 outbreak which was not contained. The scope of affected objects was larger than life.

However, in fact, Vietnam quickly controlled the pandemic at the end of May 2020 and social distancing ended in April 2020, enabling the economic reopening. As a result, most workers and business households were only supported in April 2020.

Besides, as the level of support was low, many business households did not request assistance and the value was much lower than initially expected. Moreover, due to tight conditions for support for employers to pay wages to laid-off workers and low level of loans, many employers did not really care.

Because the impact of the COVID-19 outbreak at the end of April is very serious, the Ministry of Labor, Invalids and Social Affairs is studying and proposing to the Government another support policy for workers and employers to fight against the plague.

The ministry believed that this support policy should be suitable for specific subjects. Priority will be given to supporting localities in difficulty and disadvantaged groups which are not covered by social security nets.

Sharing with VnEconomy, Dr. Nguyen Thi Lan Huong, former director of the Institute for Science, Labor and Social Affairs under the ministry, assessed that the first bailout was relatively good. Typical examples included tax reduction, extended social insurance payment and wage payment support for employers.

In the first support package of VND62 trillion, the State Budget directly disbursed VND35,880 billion; refinanced loans of VND16,200 billion through the Vietnam Bank for Social Policies; temporarily suspended payment of VND6,500 billion to retirement and survivorship funds. Some VND3,000 billion was used for training workers.

“With the experience of the first support package, the most important matter of concern in the next bailout is reducing unnecessary conditions and procedures, particularly making them more transparent for beneficiaries,” she emphasized.

Also discussing this issue, Mr. Mac Quoc Anh, Vice Chairman of the Hanoi Association of Small and Medium Enterprises, said, in the first support package, most businesses did not benefit because support conditions were complicated and hardly accessible. Conditions included the number of layoffs and revenue reduction.

Meanwhile, revised documents and guidelines only expand the scope of beneficiaries rather than change conditions for getting the support. This is one of reasons why the support policy is not consistent with reality.

Therefore, according to Mr. Anh, in the second support package, businesses expect it to be deployed as quickly as possible. At the same time, it is necessary to make administrative processes and procedures more streamlined, information more transparent and complete to provide timely support for businesses.

“These grants need to be delivered to the right beneficiaries with precise and specific criteria and the supervision and usage of the support policy needs to be effective," he said.

In addition to beneficiaries as specified in Resolution 42/NQ-CP, localities chose over 200,000 other subjects affected by the COVID-19 pandemic. The total budget was about VND200 billion.

Source: Vietnam Business Forum