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As of October 2011 in most cities in China, Social Insurance is not only required for Chinese employees but also foreign employees. Shanghai is one of the few exceptions in that it is not required for foreign employees. However, it is needed for Chinese employees. This is a complicated subject in Chinese, let alone in English.Interim Measures for Social Insurance System Coverage of Foreigners Working within the Territory of China, which was deliberated and adopted at the 67th executive meeting of the Ministry of Human Resources and Social Security and approved by the State Council, is hereby promulgated and came into effect as of October 15, 2011.In this article, we will address the necessary details regarding the social insurance system in China.The five categories for Chinese Social Insurance are retirement, medical, unemployment, injury, birth bearing. The minimum number of social insurance categories required to participate in is three, but some companies may participate in four or all five. Chinese employees often ask prospective employers regarding the number of contributing categories they offer.Some companies may also decide to participate or not in a housing fund, and this is a separate deduction if the company chooses to participate. So, there are two or three possible deductions: tax, social insurance, housing fund.The company can decide whether they will contribute the most basic amount for social insurance or if they will contribute based on the employee’s salary. Each April, the company will get a notice in the Social Insurance system online regarding selecting how many insurance coverage areas and their chosen participation amount for the year.
This is based on the policy for Shanghai. There will be a new chart issued each April. It is also different for each province or municipality. Furthermore, the percentages do stay the same if the company is paying according to the salary, but the actual monetary figures will differ.The Social Insurance department will deduct the money on the tenth of each month from the company, and the company will deduct it from the employee salary as required.Retirement: If you pay for at least 15 years, you will be able to apply for the money when you retire. However, as foreigners have not contributed for 15 years, it remains unknown if a foreigner can effectively collect. Theoretically, it is based on having a work permit and working legally in China with payments made for that amount of time and based on if you crossed the retirement age (now 60 for men and 50 for women). If the industry was in high altitude, high temperature, or very labor-intensive, then the age for men is 55 and 45 for women. Men who are over 50 and women who are over 45 and are certified as incapacitated should be allowed to retire, as well. An application needs to be filed when one retires. There is no way to show a foreigner has retired. Proving that you retired as a foreigner while there is no retirement visa is unknown. If the lowest payment is paid, then the amount is about 3,000-4,000 per month after retirement. Medical: A government-issued medical social insurance card can be used at public hospitals and general medical stores (not at clinics or international hospitals). The money is loaded each month between company and employee contributions. If you studied in China, it is unclear if, as a foreigner, there is medical insurance money added at that time. Chinese would get some health insurance money each year from during their studies that will carry over. It can only be used in the first year of your work. If you changed jobs, then the initial money will be from the previous position.Unemployment: If you pay the money, then the following month, you can go to the community center of where you live to claim this benefit. It's only 1,000 RMB per month. You cannot obtain this benefit if you do not hold a work permit and the related residence permit. If you have a work permit, but it is not canceled yet and will be out of work soon, then you can theoretically claim this benefit. Before you cancel the work permit card, maybe, you can apply to collect this. The necessary workers in most community centers don't know about this, even for Chinese nationals. Perhaps they understand and will not allow you to collect the benefit.Injury: The content of what is considered injury is very long. Generally speaking, it relates to getting injured at work or to/from work via a standard method. In these cases, you can apply for such insurance. Within 15 days of getting a work injury, the company is required to respond to your request. If the company thinks they are not responsible or it does not involve them, they will reject you, or if 15 days have passed, you can request arbitration to the Social Insurance Department of the government. With this said, it may take many visits because the company may not be a willing participant. The government department will help you to negotiate. This process can be long and drawn out, and within the law, it isn't straightforward to benefit from this insurance. It depends on the type of business as to how much this could be as some high-risk industries could make this expensive. Birth bearing: Only applies to females. The employer gives compensation in addition to the salary during at least seven months of the pregnancy. The maternity allowance for female employees during maternity leave shall be paid by the maternity insurance fund in accordance with the standard of the average monthly salary of the employee in the previous year, if this employee is covered by maternity insurance; or will be paid by the employer if this employee is not covered by maternity insurance.The medical expenses of a female employee who has given birth or aborted shall be paid by the maternity insurance fund per the items and standards prescribed by this fund if this employee is covered by maternity insurance, or shall be paid by the employer if this employee is not covered by maternity insurance.Please note: If a female employee is already paid maternity allowances, she will no longer be paid a salary by the employer. However, if the employer does not provide social insurance to female employees in time, the employer must pay a wage to the female employee during maternity leave. Any female employee can’t enjoy both at the same time.Housing fund / Provident fund: This is in addition to social insurance and is provided by some companies. The uses of this fund are for: property purchase, rentals, house decoration, and renovation, treating significant diseases (e.g. organ transplant, tumors, kidney failure, etc.). Withdraws are subject to restrictions and must be fully paid based on base salary. After the review is done, then this can be processed. At the moment, only foreigners with a Chinese Green Card can have the same rights as Chinese for this fund.Social insurance benefit money can be inherited. Foreigners that have reached retirement age and are outside of China can receive their benefits provided they supply annual official documents stamped by an overseas Chinese consulate or embassy. Such benefits can only be paid to a Chinese bank account.
What can employees do if they did not make sufficient contributions upon retirement?(a）One-off make-up payment.In some places, unpaid medical insurance premiums can be paid before the employee retires one-time.In some places, unpaid medical insurance premiums will not affect the employee to retire once he reaches the retirement age. The employee may continue to pay for medical insurance until it is up to the local standard.It's strongly recommended that you consult your local social security center for the latest information if you are about to retire soon.It is important to note that if a foreigner decides to leave China himself or herself can work with the company to obtain the employee contribution back only.To know more about it, please click and read the following articles:《Social Security Law of the People's Republic of China》Article 27：Where an individual participating in employees' basic medical insurance has made cumulative contributions for the period stipulated by the State when he/she attains statutory retirement age, he/she shall not be required to contribute basic medical insurance premiums upon retirement, and shall be entitled to primary medical insurance benefits according to the provisions of the State; where an individual has not made cumulative contributions for the period stipulated by the State when he/she attains statutory retirement age, he/she may continue to make contributions up to the period specified by the State.《Several Provisions on Implementation of the Social Security Law of the People's Republic of China》Article 7：The contribution period for which a retiree is entitled to essential medical insurance benefits stipulated in Article 27 of the Social Security Law shall be implemented according to the provisions of the respective localities.tion of primary medical insurance relationship.The contribution period for basic medical insurance of individuals participating in employees' basic medical insurance shall be computed in a cumulative way when there are a transfer and continuaton of primary medical insurance relationship.Many thanks to Bonnie, Bunny, and Gary from Kudosbay for their contributions.
Are you looking for more useful tips for your life in China? Get in touch with contributors for a consultation and follow us in our WeChat Group to receive the latest news. Expat Services (WeChat ID: ExS-SH) can add you into our WeChat group if you would like to ask the authors specific questions or concerns.
Julian is based in Shanghai but often travels for work and runs a company that works with individuals and organizations doing business between the US, China, and Africa. He has been based in China for a number of years.Ikky is an R&D Manager working in Shanghai. He has been living in China for over 11 years. Jatin (known by the nickname "Prince Jatin") is a Multicloud DevOps Expert working in Shanghai. He has been living in China for over Nine years and owns four Indian communities WeChat groups known for "Helping Indians by Indians" with their specific inquiries regarding China affairs, he is also an active contributor to few other expat communities with expat work affairs based his knowledge and research expertise.
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