COVID-19

Social security responses to COVID-19: the case of China

COVID-19

Social security responses to COVID-19: the case of China

In the People’s Republic of China, social security measures were an important component of the government’s emergency response in the context of COVID-19. The combination of adaptations to social security contributions and benefits with adjustments to operational processes and service delivery approaches enabled the social security system to contribute effectively to mitigating the economic and social impact of the crisis. The experience of China confirms the key role of administrative capacity and institutional adaptability in crisis management and emergency responses.

Social security contributions and benefits

Emergency measures concerning social security contributions and benefits had the objectives to ease the financial burden on enterprises, maintain employment levels and guarantee the basic livelihood of workers and citizens. Six major elements can be identified:

  • Waiving: Since February 2020, small and medium-sized businesses and sole-proprietorship enterprises have been eligible for exemption of the employer contributions to the old-age, unemployment and work-injury insurance schemes for up to five months.
  • Lowering: For larger enterprises, employer contributions to the old-age, unemployment and work-injury insurance schemes can be reduced by 50 per cent for up to three months. In addition, local governments have been given flexibility to adjust employer contributions to the basic medical insurance fund between February and June 2020.
  • Deferring: Enterprises with significant reductions in earnings due to the crisis have been allowed to postpone the payment of social insurance contributions for up to six months without any penalty.
  • Refunding: Micro, small- and medium-sized enterprises, which make up around 90 per cent of total employment, have been eligible for a refund of unemployment insurance contributions if they limit layoffs. Any such enterprise with a layoff rate of no more than 5.5 per cent or any enterprise with less than 30 employees and a layoff rate of no more than 20 per cent can apply for a refund of between 50 and 100 per cent of its unemployment insurance contributions of the previous year. This policy is applicable to all enterprises in Hubei Province.
  • Subsidizing: For COVID-19 diagnosis and treatment, the government has waived the 35 per cent medical fee co-payment normally at the charge of patients. The early communication of this full financial protection was important to avoid that financial barriers lead to delayed treatment of affected persons.
  • Supporting: Social security benefits were enhanced, in particular for unemployed persons. This included the provision of an unemployment subsidy of up to 80 per cent of the unemployment benefit amount to those who have exhausted their unemployment benefit entitlement, and the extension of unemployment benefit receipt for persons within one year of retirement until their retirement.

Operational processes and service delivery channels

Operational and service delivery adjustments have aimed at both implementing emergency response measures and ensuring the continued provision of normal social security benefits in the context of COVID-19 restrictions. The implementation of this double objective has been significantly facilitated by existing e-services, and in particular the nationwide unified social insurance online service platform launched in September 2019. This platform is based on a social security card linked with financial functions, and had been issued to over 1.3 billion people or over 93 per cent of the population by the end of 2019. Both employers and insured persons can register online and gain access to a range of functionalities, including paying contributions and claiming benefits.

Adjustments to operational processes and service delivery channels have included a number of measures:

  • Cooperation and communication: Social security agencies have strengthened their cooperation with local governments to carry out joint prevention and control activities, and posted pandemic awareness material in the service halls. Through letters, short message service, social media, website, mobile applications, free consultation telephone and other channels, social security agencies have called on their clients “not to meet”, and answered questions concerning social security policies and services. Structured information on social security policies and services has been made available on official websites for different employment and social security topics related to COVID-19 as well as for different types of employers, employees and other groups.
  • Emergency planning: To ensure that social security services are delivered in a safe and orderly manner and to ensure early detection, reporting, isolation and treatment, all social security agencies have been required to establish a pandemic emergency plan.
  • Service channel adaptation: To reduce the risk of cross infection, all social security agencies have also minimized ‘in-person’ services and reduced on-site personnel movement in the service halls. This has accelerated the adoption of e-services and made contact-free online services the dominant service delivery channel for many agencies. Beijing was for example among the first cities to extend medical insurance coverage to include online consultation and e-prescription offered by accredited hospitals from February 2020. This has enabled patients, and particularly risk-groups such as older persons or those with chronic diseases, to receive telemedicine services at home, settle bills online, and choose the medicine delivery modality. For people aged 65 or above with chronic diseases or incapacity, the community health service agencies have delivered medicines to the door during the pandemic.
  • Fast-track service channels: All social security agencies have established procedures to prioritize work injury protection of medical care and related staff. This included the reduction and simplification of certifications, the prioritization of the payment of their benefits and treatment expenses, and the organization of efficient and high-quality treatment of the affected staff.
  • Administrative flexibility: A number of temporary measures have been introduced to ensure that all social insurance benefits continue to be paid on time. For instance, pensioners on medical treatment who fail to submit a life certificate on schedule have continued to receive their full pension. Even if employers have failed to process declarations of new retirees, pensions will be paid retroactively once the declaration is done and validated. Online unemployment insurance benefits claims have been accepted in 297 cities, which temporarily replaces the regular mandatory practice for the unemployed to register in public service agencies and to prove their job-search efforts. This service is also accessible through phone and mailing channels and the online service is gradually extended to more cities.

The Chinese social security response to COVID-19 reflects the complementarity between measures regarding contributions and benefits and adjustments to operational and service delivery processes. Administrative capacity and institutional adaptability in crisis management and emergency responses are an important enabling factor in this context.