Social Insurance in Viet Nam Fully Covers Maternity Leave

June 04, 2018

Description & Context

The Vietnamese Law on Social Insurance sets out the provisions and funding mechanism for maternity leave and it is administered by the Ministry of Labour, War Invalids and Social Affairs (3).


Main Components

Selected articles of Section 2 of the Social Insurance Law in Vietnam are summarized and presented below:

  • Article 28: Laborers entitled to the maternity leave – female laborers that become pregnant, give birth, adopt, including female laborers with IUDs or take sterilization measures
  • Article 29: Provides a period of leave of one day each for 5 prenatal checkups
  • Article 30: Provides a period of leave between 10-50 days for women who miscarry, abort, fetocytosis, or stillbirth depending on their pregnancy length at the time of the incident.
  • Article 31: Maternity leave after giving birth. Has been updated to 6 months of paid maternity leave.
  • Article 35: Level of maternity allowance – Laborers under article 28 are entitled to 100% of their average monthly salary. During this period, laborers are not required to pay social insurance premiums.
  • Article 36: Women may return to work only after a full 60 days after the child is born, and must have a medical establishment’s certification that working will not harm her health.
  • Article 37: If women remain weak after the paid maternity leave period of 6 months, they may take leave for convalescence and health rehabilitation for between 5 and 10 days per year. They receive a daily benefit level at a percentage of the common minimum salary for these days.

The 2014 Social Insurance Law also stipulates that the maternity fund is covered by the compulsory social insurance fund, of which the contributions to include (15):

Insured person: 8% of gross monthly earnings

  • The minimum earnings for contribution calculation purposes are equal to the minimum wage.
  • The maximum earnings for contribution calculation purposes are 20 times the minimum wage.
  • The minimum monthly wage is 1,210,000 VND ($53.12 USD) as of 2016.

Self-employed person: 22% of declared earnings

  • The minimum earnings for contribution calculation purposes are equal to the rural poverty line 700,000 VND ($30.73 USD) as of 2016
  • The maximum earnings for contribution calculation purposes are 20 times the minimum wage.
  • The minimum monthly wage is 1,210,000 VND ($53.12 USD) as of 2016.

Employer: 18% of monthly payroll (2014 figure)

  • The minimum earnings for contribution calculation purposes are equal to the legal monthly minimum wage for civil servants.
  • The maximum earnings for contribution calculation purposes are 20 times the minimum wage.
  • The minimum monthly wage is 1,210,000 VND ($53.12 USD) as of 2016.

Government: Subsidies as necessary

 The law stipulates that the Government will annually report to the National Assembly on the management and use of the social insurance fund and, once every three years, the state audit will audit the social insurance fund and report on the results to the National Assembly (3). 


Evidence of Implementation Strategy

Vietnam’s exclusive breastfeeding prevalence increased slightly; from 17% exclusive breastfeeding in the first 6
months of the infant’s life in 2006 to 19.6% in 2015 (11,12). However, there has been much praise for Vietnam’s extended coverage of maternity leave; the 2015 WBTi cites improvement in maternity leave in both the private and public sector because of an extension of the leave time in 2013 (11), and a report by the World Alliance for Breastfeeding Action (WABA) states that the recent improvement in maternity protection in Vietnam was affordable and greatly beneficial to the health of mothers and children (14). The main reasons cited for the low breastfeeding rates are a lack of education on the benefits of breastfeeding and the use of infant formula in lieu of breast milk (13).

Social insurance expenditures have steadily increased over the past seven years in Vietnam– from 28,419 billion VND ($1.25 million USD) in 2009 to 101,201 billion VND ($4.5 million USD) in 2015 (4). These funds cover benefits that include maternity leave. While there is no figure reporting how many women take maternity leave in Vietnam, half of Vietnam’s workforce are women who research indicates strongly support maternity leave: a study by the General Conference of Labor in Vietnam found that 89.2% of female workers with children supported six months of maternity leave (5).


Cost and Cost-Effectiveness

A 2014 World Alliance for Breastfeeding Action (WABA) presentation on the investment in maternity protection in Vietnam cited that the recent increase in maternity leave to 6 months was cost-effective: the Social Insurance Fund had reported a surplus of funds amounting to $340 million in recent years (USD), which was more than sufficient to cover the extra maternity leave and still left a surplus of 8% (14). In addition, an Alive & Thrive report states that by increasing maternity leave, mothers will be able to breastfeed exclusively for longer, reducing the high costs associated with formula feeding; on average, it costs families approximately 800,00 VND (1.2 million per month) to feed a child with breastmilk substitutes, a figure that is 53-79% of the average Vietnamese family’s income (5).

Paid maternity leave has been shown to have significant benefits for the newborn child and their parents; a 2011 study of 141 countries with paid maternity leave showed as much as a 10% decrease in infant mortality (6). Paid maternity leave is more likely to increase the rate and duration of breastfeeding, reducing the risk of malnutrition as breast milk provides all of the vitamins, minerals, and nutrients a child needs for their first six months of life as
well as contains natural antibodies to combat disease during these fragile first months (7,8). In addition, infants are more likely to be taken to receive immunizations if a parent is at home (7). Mental health is impacted as well: a
2012 study reported women who took longer than 12 weeks paid maternity leave reported fewer depressive symptoms (9). Finally, paid maternity leave benefits the country and family economically; paid leave has been shown to increase labor force participation and productivity, as women can return to their jobs where they have already developed skills after maternity leave (10). Paid maternity leave clearly provides financial security for those who could not afford to take leave otherwise (10).


Perceptions and Experiences of Interested People

A study by the General Confederation of Labor in Vietnam in 2011 found that the major reason mothers stop breastfeeding is that they must return to work, and that nearly 90% of Vietnamese female workers with children supported six months of maternity leave (5). In 2013, because of the widespread support, Vietnam extended their maternity leave from four to six months (5). 91% of Vietnamese legislators voted for this extension (14). Neemat Hajeebhoy, the country director for Alive & Thrive in Vietnam at that time strongly supported the maternity leave, quoted as saying, “providing mothers 6 to 12 months off their 30 years of working is an intelligent investment in the health and well-being of 50 percent of our nation’s current workforce and 100 percent of our nation’s future workforce” (5).

There has been much praise for Vietnam’s extended coverage of maternity leave; the 2015 WBTi cites improvement in maternity leave in both the private and public sector (11), and a report by the World Alliance for Breastfeeding Action (WABA) reports that the recent improvement in maternity protection in Vietnam was affordable and greatly beneficial to the health of mothers and children (14). The main reasons cited for the low breastfeeding rates are a lack of education on the benefits of breastfeeding and the use of infant formula in lieu of breast milk (13).


Benefits and Potential Damages and Risks

  • Funding maternity legislation through social insurance funds will not ensure coverage of those that seek private care and private insurance. In addition, Vietnam cites that an aging population may cause a threat to the sustainability of the social insurance fund, decreasing funds available for maternity protection in the long-run (4). The source of funds must be sustainable.
  • There is a risk that not all populations are being reached with this legislation; the WBTi states that laboring women that are not state officials, such as workers at small manufacturing facilities, enterprises, or agriculture and women working in the informal sector may be at particular risk of not receiving benefits. There is also a risk that without a monitoring system in place, employers may not grant their women their full maternity leave, especially if the employees are not aware of the full legislation. 

Scaling Up Considerations

  • The government must rely on past data of women in the workforce, what percentage of these women take leave, and the amount of funds available in the social insurance fund to allocate. Data collection, estimation, and monitoring are essential.
  • It is important that mothers are aware of maternity leave legislation and the importance of maternity leave; communication, education, and information at community levels can be used to inform women (11).

Barriers to Implement

  • Obtaining adequate and sustained funding to cover all women seeking maternity leave is a potential barrier. Government’s needs accurate data on women in the workforce, the percentage of women that take leave, and the amount of funds available in the social insurance fund to allocate. Data collection, estimation, and monitoring are essential.
  • Working mothers may be unaware of their maternity leave legislation and the importance of maternity leave; communication, education, and information at is needed to inform women and employers (11).

Equity Considerations

  • Vietnam’s maternity leave only covers working mothers through the Social Insurance Fund. Unemployed mothers may find it hard to receive additional funds outside of unemployment benefits to care for their child (2).
  • There is a risk that not all populations are being reached with this legislation; the WBTi states that laboring women that are not state officials, such as female workers at small manufacturing facilities, enterprises, or agriculture and women working in the informal sector may not receive benefits due to the lack of government oversight in their field. There is also a risk that without a monitoring system in place, employers may not grant their women their full maternity leave, especially if the employees are not aware of the full legislation. 

References:

1.                   Vietnam Briefing: Dezan Shira and Associates. (2015). Maternity Leave in Vietnam. Retrieved from http://www.vietnam-briefing.com/news/maternity-leave-vietnam.html/

2.                   Social Security: Office of Retirement and Disability Policy. (2008). Old Age, Disability, and Survivors. Retrieved from https://www.ssa.gov/policy/docs/progdesc/ssptw/2008-2009/asia/vietnam.html

3.                   Ministry of Justice, Socialist Republic of Viet Nam. (2006). Law on Social Insurance. Retrieved from http://www.moj.gov.vn/vbpq/en/Lists/Vn%20bn%20php%20lut/View_Detail.aspx?ItemID=4751

4.                   Ministry of Finance, Vietnam. (2015). Aging Population and Expanding Social Insurance in Vietnam. Retrieved from  https://www.imf.org/external/np/seminars/eng/2016/srilanka/pdf/0715_2-3.pdf

5.                   Alive & Thrive. (2012). A Strong Maternity Leave Policy: A Strong Investment in Viet Nam’s Future. Retrieved from http://aliveandthrive.org/wp-content/uploads/2014/11/Maternity-Leave-Booklet-2012-English.pdf

6.                   Dr. Heymann, J. et al. “Creating and Using New Data Sources to Analyze the Relationship Between Social Policy and Global Health: The Case of Maternal Leave” (2011). Public Health Reports. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3150137/

7.                   Applebaum, E. and Ruth Milkman. “Leaves that Pay” (2011). Center for Women and Work, Rutgers University. Retrieved from http://i2.cdn.turner.com/cnn/2015/images/10/28/paid-family-leave-1-2011.pdf

8.                   Breastfeeding (2017). UNICEF. Retrieved from https://www.unicef.org/nutrition/index_24824.html

9.                   Chatterji, P. and Sara Markowitz. “Family Leave After Childbirth and the Mental Health of New Mothers” (2012). The Journal of Mental Health Policy and Economics 15: 61-76. Retrieved from http://i2.cdn.turner.com/cnn/2015/images/10/28/15-061_text.pdf

10.               The Economic Benefits of Paid Leave (2015). Democratic Staff of the Joint Economic Committee of the United States. Retrieved from  https://www.jec.senate.gov/public/_cache/files/646d2340-dcd4-4614-ada9-be5b1c3f445c/jec-fact-sheet---economic-benefits-of-paid-leave.pdf

11.               World Breastfeeding Trends Initiative. (2015). Country Report: Vietnam. Retrieved from http://www.worldbreastfeedingtrends.org/GenerateReports/report/WBTi-Vietnam-2015.pdf

12.               UNICEF. (2006). Vietnam Multiple Indicator Cluster Survey 2006. Retrieved from  http://mics.unicef.org/files?job=W1siZiIsIjIwMTUvMDEvMjcvMTIvMzAvMDEvNTgvTUlDU19ib29rbGV0X2luX0VuZy5wZGYiXV0&sha=5862fa82ba6dedba

13.               Tuoi Tre News. (2014). “Vietnam’s Rate of Breastfed Children Lowest in Southeast Asia.” Retrieved from https://tuoitrenews.vn/society/21457/vietnams-rate-of-breastfed-children-lowest-in-southeast-asia

14.               Thien, Mai Duc, Deputy General Director of Ministry of Labor, War Invalids, and Social Affairs of Vietnam; WABA (2014). “Maternity Protection of Vietnam: The Investment Case.” Retrieved from http://waba.org.my/stockholm-symposium/wp-content/uploads/2015/10/4.-Mai-Duch-Thien-Maternity-Protection-of-Viet-Nam.pdf

15.               Social Security: Office of Retirement and Disability Policy. (2016). Old Age, Disability, and Survivors. Retrieved from  https://www.ssa.gov/policy/docs/progdesc/ssptw/2016-2017/asia/vietnam.html

16.               World Breastfeeding Trends Initiative. (2008). Country Report: Vietnam. Retrieved from http://www.worldbreastfeedingtrends.org/GenerateReports/report/WBTi-Vietnam-2008.pdf

Submitted by Katie Doucet on June 04, 2018