Social security assists Chinese earthquake victims

Social security services are at the centre of efforts to support the victims.

Six months after a devastating earthquake hit China, social security services are at the centre of efforts to rebuild livelihoods and provide basic support to the victims.

On 12 May 2008, an earthquake measuring 8.0 on the Richter Scale hit Sichuan and nearby provinces in China, killing nearly 70,000 people, injuring hundreds of thousands and leaving over five million people homeless. The disaster not only devastated lives and livelihoods, but also destroyed services and infrastructure. In Sichuan and neighbouring Gansu and Shaanxi provinces, an estimated five million buildings collapsed, 21 million buildings were damaged and over 40 million people were affected by the earthquake (Source: China Daily, 16 July 2008).    

In the wake of the emergency relief efforts, social security institutions have mobilized resources to assist the victims. In accordance with a series of central guidelines and drawing on the international experience of post-disaster reconstruction, the government of the most-affected Sichuan Province quickly enacted a series of policy measures to assist the restoration and rebuilding efforts.

Lower insurance premiums

One of the first measures was to reduce or suspend insurance premiums. Within one to three years, employers' contributions to the unemployment insurance fund will be reduced from 2 per cent to 1 per cent of payroll while that of individual workers from 1 per cent to 0.5 per cent. For a period of two years after the earthquake, the personal contributions to be paid for the non-salaried urban resident medical insurance by the vulnerable groups in the stricken area will be covered by the urban and rural medical assistance funds.

Deferred payment of contributions

During the suspension of production due to the earthquake, the employers and the employees were allowed to defer their contributions for social insurance concerning pension, medical care, unemployment, work injury and maternity. No fines or interest will be levied for the period of deferred payment and the covered employees are entitled to all benefits as prescribed.

Early retirement arrangements

The senior workers in the stricken enterprises who are less than five years from retirement age may apply for a transitional internal retirement, under which the employer will pay such a person the monthly subsistence fee, and both the employer and the employee should continue to pay their social insurance contributions until the employee reaches retirement age and starts to receive their regular social insurance pension benefit.    

Individually insured people (such as the self-employed) who have completely lost their working capacity due to non-work related injuries in the earthquake may also apply for early retirement if they meet the criteria for the minimum number of years of contribution. In case the number of years is inadequate, the person concerned may also be allowed to retire and receive a pension benefit after paying a lump-sum to make up for the number of years.    

Compensation of victims

Dependents of those who died and people who were injured during their work or as a result of the earthquake will be compensated accordingly under the work injury regulations. The cost of emergency rescue and treatment of the injured personnel in the stricken areas is to be covered mainly under the central and local government budget, with donations serving as a complement. The central government has reportedly planned to set aside 70 billion CNY to boost reconstruction of the stricken regions. Furthermore, as of 12 June 2008, the donations (both in money and in kind) from home and abroad exceeded 60 billion CNY.    

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