A new Social Insurance Law was passed on October 28, 2010, which consolidates existing social insurance regulations and introduces several new provisions. The new law becomes effective on July 1, 2011.
Five types of coverage
The new Social Insurance Law sets out the five insurance coverages provided to all Chinese citizens:
- Old age pension
- Basic medical
- Unemployment
- Maternity
- Work injury
Participants
The law applies to all employers in the PRC and all to individuals, including city residents, flexibly employed people, migrant workers and foreigners.
Portability
The new law allows basic pension, basic medial and unemployment coverages to be transferred when an individual changes job or moves to another province or city. Premium contribution years in different locations will be counted cumulatively. This is important, since previously there were considerable obstacles to transferring and receiving benefits on moving residence.
The new law also gives enhanced powers to the social security authority to recover back contributions if employers do not pay or underpay contributions for their employees.
Foreign nationals
Under the new law, foreign nationals will also participate in the national pension system. Although earlier regulations included this, many cities did not have systems that allowed foreigners to participate. The government has announced that it will be negotiating social security totalisation agreements with other countries in order to avoid contributors having to make double payments.
The new Social Insurance Law sets out the five insurance coverages provided to all Chinese citizens:
- Old age pension
- Basic medical
- Unemployment
- Maternity
- Work injury
Participants
The law applies to all employers in the PRC and all to individuals, including city residents, flexibly employed people, migrant workers and foreigners.
Portability
The new law allows basic pension, basic medial and unemployment coverages to be transferred when an individual changes job or moves to another province or city. Premium contribution years in different locations will be counted cumulatively. This is important, since previously there were considerable obstacles to transferring and receiving benefits on moving residence.
The new law also gives enhanced powers to the social security authority to recover back contributions if employers do not pay or underpay contributions for their employees.
Foreign nationals
Under the new law, foreign nationals will also participate in the national pension system. Although earlier regulations included this, many cities did not have systems that allowed foreigners to participate. The government has announced that it will be negotiating social security totalisation agreements with other countries in order to avoid contributors having to make double payments.