1. UI IMPLEMENTATION IN VIETNAM: CHALLENGES AND WAYS FORWARDS
Ngo Thi Loan, ILO, 2013

2. Structure of presentation
Facts of UI Implementation in Vietnam
Challenges of UI legislation and implementation
Ways forwards

3. Facts The SI law adopted in 2006 Collections started in 2009
Payments begin since 2010
By 2009
By 2010
By 2011
By 2012 (est’)
No. Insured Members (million people)
5.9
7.2
7.9
8.3
Contributions (in million USD)
167
257
321
379
Delinquency (in million USD)
2.3
14.6
17.8
17.4
Fund reserve (accumulated- in million USD)
174.6
427.6
741.9
1,144.2

4. FACTS – Service delivered

5. Facts- issues Design of the system
Limited coverage: cover only 16% total labour force. Informal workers, workers with contract less than 12 months, or working in employers with less than 10 workers are not included.
Not targeting real unemployed: Whoever quits job for any reason, treated equally
Lump sum payments for those who found a job before finishing UI benefits.
UI benefits are not secured in case employers are late or evaded in making UI contributions.
Basic salary, not total earnings, is used as insurable salary
Operations
Weak linkage between unemployment allowance and return-to-work support
IT system is not yet functioning well.
Coordination among the implementing agencies
Inefficient complaining/appealing system
Inadequate fraud control (No Identification number), inspection systems.

6. Challenges and opportunities
Reach out to informal groups
Improve the compliance rate
Have unique identification number for individuals
Integrate systems run by various implementing partners
Opportunities
Employment law is about being adopted by National Assembly.
New Labour codes passed in 2012
Better awareness of workers and employers about the scheme

7. ILO’s Policy suggestions for VN UI
Extending its coverage to include employers with less than 10 employees and workers with less than 12-month contract
Reviewing policies for those who have left employment without just cause (misconduct and voluntary quitters)
Reinforcing the linkages between unemployment benefits and employment support services, including re-skilling programmes
Widening legal definition of insurable earnings to include bonus and overtime pay
Securing UI entitlement of workers employed by employers how fail to pay contributions
Establishing/reinforcing prevention, investigation, monitoring, enforcement and appealing mechanisms

8. Developing strategic plan of UI scheme: to achieve defined objective and targets for improvement of the system in medium and long terms.
Using “SMART” KPIs to measure the scheme’s performance against the objectives
Conducting regular actuarial assessment and costing exercises to propose improvement of the scheme (policy reform).
Carrying out feasibility study for any major scheme’s reform (new institutional settings, new benefits, adjustment of parameters, etc..)

9. Unemployment protection for those not covered by the UI scheme
Need for the design and introduction of some special support programmes targeting:
long-term unemployed,
first time job seekers,
older workers,
seasonal workers,
part-time,
domestic workers,
farmers and fishermen
unpaid family workers
self-employed
other informal economy workers