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China drafts law to safeguard operation of social security system
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07:58, December 24, 2007

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China's top legislature on Sunday began to read the draft law on social security to safeguard operation of an extensive social security system.

It was submitted to the weeklong 31st session of the Standing Committee of the National People's Congress (NPC), or China's top legislature, for the first reading.

According to the draft law, China's social security system was composed of five parts: pension insurance, medical insurance, work injury insurance, unemployment insurance and maternity insurance.

China had established its social security system at a preliminary stage. By the end of September, 197 million Chinese had been insured for pension insurance, 115 million for unemployment insurance, 189 million for medical insurance, 115 million for work injury insurance and 73 million for maternity insurance, according to the Ministry of Labour and Social Security(MLSS).

However, these different kinds of insurance were regulated according to different regulations or polices. China lacked in a comprehensive law to regulate its social security system and safeguard the management and operation of the social security system.

Currently, some employers had refused to insure their employees or deliberately defaulted paying insurance fees for their staff for lack of clear punishment. Meanwhile, an incomplete social security system also hindered rational migration of labor, the MLSS said.

Tian Chengping, MLSS minister, said: "People of various circles have called on enacting a society security law as the social security system is of vital importance to building a harmonious and a comparatively well-off society in an all-round way."

The draft law, with eight chapters and 63 provisions, outlined the legal framework for the social security system and specified principle, scope, prerequisites, management and supervision of the social security system.

According to the law, the pension and unemployment insurance would cover all full-time employees, excluding public servants; the medical insurance would cover all employees; work injury and maternity insurance would cover all employees, excluding public servants.

The draft law also detailed stated punishments on those who violated it. With the social security administrations approval, institutions in charge of fee collecting could directly transfer fees from the employer's bank accounts if it failed to pay enough insurance for its employees, the draft law said.

It stated the institutions in charge of fee collecting could even make an application to a court to confiscate and sell the property of serious violators so as to compensate insurance fees.


It said government at the county level should establish supervision systems to safeguard the secure and efficient operation of the fund.

It also said those who fabricated documents to swindle the social security fund must return the funds and be fined twice or five times the amount they swindled.

The draft law stipulated that all social security funds should be used for specified purposes only. No institutions or persons had the right to occupy or embezzle from the fund.

If the security fund was embezzled, the social security administration departments, financial departments and audit offices should recover the embezzled funds; illegal income earned from embezzled social security funds should be confiscated and personnel involved would be punished according to law.

Tian said: "We need to enact laws to ensure China's social security system conforms to its economic and social development."

"With such a system, Chinese people can get material assistance when they become aged, ill, injured, unemployed or give birth to baby."

He stressed the system was necessary to enable Chinese to enjoy benefits brought by the country's economic progress and to promote social stability.

To make management of the fund more transparent, the draft law asked institutions in charge of social security cases to disclose income, expenditure, surplus and profit of the fund regularly.

It also said that individual's Identification Card number will be registered as the insurant's social security number. Public security organs should inform the insurance fee collector with insurant's status such as birth, death and residence information, the draft bill said.

Source: Xinhua

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