The first two decades of the 21st century will be a critical period in the
development of China's old-age insurance. The state will further improve the
basic old-age insurance system that combines social pool and personal accounts,
and gradually consolidate the latter. Basic old-age insurance will extend to
cover all eligible employees in urban areas, and at the provincial level the
establishment and improvement of regulating funds for old-age insurance will be
carried out. Social pool at the city level shall be improved and gradually
raised to that at the provincial level.
II. Unemployment Insurance
While promoting the reform of the enterprise employment system and setting up
a market-oriented employment mechanism, the Chinese Government is speeding up
the development and improvement of an unemployment insurance system to guarantee
the basic livelihood of employees after they lose their jobs, to help them find
new jobs, and accelerate the combination of the basic livelihood guarantee
system for people laid off from state-owned enterprises with the unemployment
insurance. By the end of 2003 there were 103.73 million people who participated
in the unemployment insurance scheme, which provided unemployment insurance
benefits of varying time limits to 7.42 million laid-off employees throughout
the year.
Standardizing and Improving the Unemployment
Insurance System
In 1999, the Chinese Government issued the "Regulations on Unemployment
Insurance," which effectively standardized and improved the unemployment
insurance system.
-- Range of participation and premium payment. All enterprises and
institutions in urban areas and their employees must participate in the
unemployment insurance program, under which employers pay two percent of their
total wage bill and individuals pay one percent of their personal wages as
unemployment insurance premiums. When the unemployment insurance funds in areas
that have participated in the social pool program are not enough, the shortfall
shall be made up by unemployment insurance regulating funds or subsidized by
local financial budgets.
-- Qualifying conditions for unemployment insurance. Laid-off persons must
meet three requirements to qualify for unemployment insurance: having paid
unemployment insurance premiums for at least one year; not having terminated
their employment voluntarily; having registered as unemployed and being willing
to be re-employed.
-- Rate of unemployment insurance allowance. The people's governments of
provinces, autonomous regions and municipalities directly under the Central
Government determine the unemployment insurance allowance in their own
localities, which shall be lower than the minimum wage in their localities but
higher than the minimum living allowance for urban residents. Provisions
regarding the time limit during which one receives the benefits are as follows:
An unemployed person whose former employer and himself or herself have
continually paid unemployment insurance premiums for more than one year but less
than five years is eligible for benefits for up to 12 months; if they have paid
the premiums for more than five years but less than 10 years, the unemployed
person is eligible for benefits for up to 18 months; if they have paid the
premiums for more than 10 years, the unemployed person is eligible for benefits
for up to 24 months.
-- Other unemployment insurance benefits. If an unemployed person falls ill
while enjoying unemployment insurance allowance, he or she is entitled to
receiving medical subsidies. If the unemployed person dies during this period,
his or her family can receive funeral subsidies as well as a pension. In
addition, an unemployed person may receive vocational training and subsidies for
job agency services when receiving unemployment insurance allowance.
-- Unemployment insurance provisions for farmers-turned-contract- workers who
are employed by enterprises and institutions in urban areas. Their employers
shall pay unemployment insurance premiums as required, while the individual
workers shall not. Those who have worked for one year continuously, those who do
not renew their contracts upon expiration or those who terminate their contracts
before they expire can apply for a living allowance, which shall come in a lump
sum depending on the length of time they have been employed.
