How do I get social security and a public pension in China?
Photo by CEphoto, Uwe Aranas/CC-BY-SA-3.0
According to Chinese law, foreigners working in China – that is, those who are working legally in the country – have the same rights as their Chinese colleagues in terms of social insurance benefits.
Chinese social insurance schemes
China’s standard social insurance scheme comprises five types of insurance: the basic pension, basic health insurance, occupational injury insurance, unemployment insurance and maternity insurance. All five are compulsory and intended to protect and benefit employees.
The basic pension plan
This is jointly paid by both employee and employer into a single pool for all employees; when it comes time to retire (60 years of age for men, 50 for women), the government pays out a proportion of the money to each employee based on how much he or she paid in, and the cost of living in the place that they were most located in during employment.
Payments into the plan are made monthly; the employee pays about eight percent of his salary, while the employer pays about 20 percent of the total salary of all employees. The employee’s payments are deducted from their salaries automatically, and after they retire they can receive the pension on monthly basis.
If an employee’s basic pension has been paid for less than 15 years, their plan is not valid and they cannot receive a monthly pension even after retirement. In this case they can either withdraw all the money paid, or continue to pay into the pension scheme based on the amount they paid before retirement; when they reach the 15 year mark, they can begin to receive the monthly pension.
Foreigners can still receive their pension even if they leave China after retiring, although it needs to be paid into a Chinese bank account, and the pensioners must undergo an annual verification in order to keep the payments coming in, which would require an annual visit to China.
Basic health insurance
This also covers all employees, including foreigners. The employer pays six percent of the employee’s salary into the health insurance scheme, which can be used for hospital treatment and in-patient care. Employees automatically contribute two percent of their paycheck, which goes into a personal medical account. Employees will receive a card for this personal medical account, which can be used to pay for visits to the doctor and buying medicine; note that your employer’s insurance may well restrict you to using Chinese hospitals, not international ones.
Occupational injury insurance
This insurance is solely paid by the employer, for the purposes of compensating employees that are injured during the course of their job.
Both the employer and employee pay into unemployment insurance. The amount paid in differs depending on which province and municipality the individual is employed in.
This is solely paid by employer. It is paid out to female employees during their maternity leave, and if they elect to undergo contraceptive surgery, namely tubal ligation (‘having their tubes tied’) and abortion.
The social insurance scheme is legally mandated and compulsory; it is not possible to voluntarily leave the social insurance scheme. Employers must register the social insurance scheme on behalf of their employees within 30 days of the labor contract being signed. Employers who refuse to pay for the scheme or delay the payment will be punished.