Auf dem weg zu einem neuen sozialrecht und reform des systems der sozialen sicherheit erfahrungen von deutschland und deren anpassung an vietnam

Social assistance Sozialhilfe ...165 3.1 Basic principles of social assistance ...166 3.1.1 Nachrangigkeitsprinzip...166 3.1.2 Principle of individualization Individualisierungsprinzip .

Bei der Juristischen Fakultät der Universität Potsdam

Von: Le Thi Thuy Huong

Geboren am: 25.05.1972 in Hanoi – Vietnam

Präsidentin der Universität Potsdam:

Prof Dr Sabine Kunst

Dekan der Juristischen Fakultät der Universität Potsdam:

Prof Dr Stefan Saar

Gutachter:

1 Prof Dr Dieter C Umbach

2 Prof Dr Markus Krajewski

Tag der mündlichen Prüfung: 17.11.2008

Die Arbeit lag der Juristischen Fakultät der Universität Potsdam im Sommersemester 2008 als Dissertation vor Sie wurde Anfang Juni 2008 abgeschlossen und hat neuere Gesetzgebung und Literatur, die bis zum Mai 2008 erschienen ist, berücksichtigt

Diese Arbeit ist auf Englisch geschrieben worden, was sicherlich an deutschen Fakultäten (noch) eine Ausnahme ist und zweierlei voraussetzt: Erstens, dass die Literatur auch in Englisch verfügbar ist, und, Zweitens, dass der Betreuer in der Fremdsprache zu Hause ist Beide Voraussetzungen waren uneingeschränkt gegeben Für mich als Autorin war es ein großer Vorteil, dass ich nicht –wie dies traditionell früher war –längere Zeit auf die perfektere Beherrschung der deutschen Sprache verwenden musste, sondern mich gleich auf die Arbeit konzentrieren konnte Selbstverständlich sind die deutsche Literatur und die europäischen Diskussionen gleichwohl mit berücksichtigt worden Natürlich ist die Thematik nicht um ihrer selbst willen behandelt worden, sondern sie soll –wie schon die früheren Arbeiten meiner Kommilitonen und Kommilitoninnen am „alten Lehrstuhl“ - dazu beitragen, mögliche Strukturen und Institutionen, Theorien und Praxis für Vietnam dazustellen und zu überdenken Dass die Arbeit auf Englisch vorliegt, macht sie zudem einem größeren Leserkreis in meinem Heimatland zugänglich

Idee, Entschluss, Disziplin und die Arbeit des Denkens und Schreibens sind die notwendigen Voraussetzungen zum Gelingen einer Dissertation, die der Autor, hier die Autorin selbst erbringen muss Doch das Vorhaben wäre nicht gelungen, wenn die Verfasserin nicht vielfältige Unterstützung erhalten hätte

Besonderer Dank steht meinem Doktorvater, Herrn Professor Dr Dieter C Umbach, der diese Arbeit mit großer Verantwortung, Freundlichkeit und Geduld betreut und mir bei der Fertigstellung geholfen hat, zu Mit Interesse, Kompetenz und Wohlwollen beschäftigt er sich seit acht Jahren intensiv mit der Reform der vietnamesischen Rechtssysteme und der Situation des Rechtsstaats in Südostasien Dadurch versteht er deutlich die vietnamesische Praxis Er hat mir diese Thema vorgeschlagen und bei der Betreuung mich mehrfach nahe

an der vietnamesischen Praxis beraten Seine Betreuung der Dissertation war fordernd und

fördernd zu gleich; für beides bin ich ihm gleichermaßen dankbar, ebenso die Hilfe und Diskussionen seines früheren Lehrstuhls und die oft gerühmten Doktoranden-Seminare

Ohne die finanzielle Unterstützung vom vietnamesischen Ministerium der Erziehung und Bildung (MOET), des Deutschen Akademischen Austausch Dienstes (DAAD) und der zuständigen hilfreichen Stellen der Universität Potsdam- die mit Hilfsbereitschaft und Kreativität die Finanzierung unterstützen - wäre meine Promotion in Deutschland nicht zustande gekommen Dafür bin ich ihnen sehr dankbar

Mein Dank gilt auch meinen Kollegen und Kolleginnen in meiner Juristischen Universität der Ho Chi Minh Stadt, dem früheren Saigon, und meinen Freunde in Deutschland für ihre Unterstützung

Sehr dankbar bin ich meiner ganzen Familie, besonders meinen geliebten Eltern, meine Geschwister und meinem Ehemann Ohne sein Verständnis und seine Unterstützung hätte diese Dissertation nicht angefertigt werden können Allen ihnen schulde ich Dank Diese Arbeit ist deshalb ihnen gewidmet

Potsdam, im Juli 2008

Le, Thi Thuy Huong

CONTENTS i

LIST OF ABREVIATIONS iv

INTRODUCTION 1

I Needs of the research 1

II Objectives, study methods and structure of the research 3

Chapter 1: Theoretical backgrounds of Vietnamese social security law 6

I Concept of social security 6

1 Definitions of social security 6

1.1 In narrow meaning 6

1.2 In broad meaning 13

2 Concept of social security in Vietnam’s perspective 17

3 Roles of social security 22

4 Basic principles of social security 23

4.1 Principle of solidarity 24

4.2 The principle of equality 26

4.3 The principle of participation of those protected 26

II Social security system 27

1 The coverage 27

2 Benefits 29

3 Finance 33

4 Administration 37

III Tendency of reforming social security system 38

1 Requirements of reforming social security system 38

2 Potential measures 39

2.1 Re-defining the scope of social security 39

2.2 Financial reforms in reinforcing social security schemes 41

2.3 Privatized structure of social security scheme 42

2.4 Cutting benefits and increasing contributions 44

2.5 Other measures 44

IV Vietnamese social security law 47

1 The recognition of social security right in Vietnamese Constitution 1992 47

1.1 The recognition of social security in international law 47

1.2 The recognition of social security right in the Vietnamese Constitution of 1992 50

2 Social security law in Vietnamese legal system 52

3 Main branches of Vietnamese social security law 53

3.1 Social insurance 53

3.2 Social assistance 56

3.3 Social privilege 57

4 Relations between social security law and other laws in Vietnamese legal system 57

4.1 Administration law 57

4.2 Labor Law 58

Short conclusion 59

Chapter 2: Overview of social security system of Vietnam 61

I Development of Vietnamese social security system 61

1 History of Vietnamese social security system 61

2 Current social security system 63

II. Social insurance (Bao hiem xa hoi) 64

1 The development of social insurance legislation before the adoption of Social Insurance Law (“SIL”) 2006 64

1.1 Interim Regulation on Social Insurance 1961 (“IRSI 1961”) 64

1.2 Interim Regulation on Social Insurance 1993 (“IRSI 1993”) 66

1.3 Regulation on Social Insurance 1995 (“RSI 1995”) 68

1.4 The adoption of SIL 2006 69

2 Social insurance schemes 72

2.1 The coverage 72

2.1.1 Compulsory social insurance 72

2.1.2 Voluntary social insurance 74

2.2 Benefits 78

2.2.1 Main benefits 78

2.2.2 Some issues about unemployment benefit 81

2.3 Social insurance funds 85

III. Health insurance (Bao hiem y te) 90

1 Legislation 90

2 Benefits and administration 93

IV. Social assistance (Cuu tro xa hoi) 97

1 Legislation 97

2 Benefits and administration 99

V Social privilege (Uu dai xa hoi) 100

1 Legislation 100

2 Benefits and administration 101

Short conclusion 102

Chapter 3: An overview of German social law 105

I Concept of German social security law 105

1 Definitions 105

1.1 Social insurance law 105

1.2 Social law 106

2. Principle of social state in German Basic Law (Grundgesetz – GG) 107

3 The classifications of German social law 112

II The development of German social security law 115

1 The development of social insurance law 115

2 The codification of German Social Code (SGB) 122

3 The structure of SGB 126

3.1 General part (SGB I and SGB X) 127

3.2 Specific part (SGB II – IX, XI and XII) 130

III German social security system 132

1. Social insurance (Sozialversicherung) 132

1.1 Health insurance 134

1.2 Accident insurance 139

1.3 Pension insurance 140

1.3.1 Statutory pension insurance 141

1.3.2 The supplementary occupational pension schemes 144

1.3.3 The additional voluntary personal old-age provisions 145

1.3.4 Pensions reforms in Germany 146

1.4 Unemployment insurance 151

1.5 Long-term care insurance 158

1.6 Special social insurance schemes for farmers 160

2. Social compensation (Soziale Entschädigung) 163

3. Social assistance (Sozialhilfe) 165

3.1 Basic principles of social assistance 166

3.1.1 Nachrangigkeitsprinzip 166

3.1.2 Principle of individualization (Individualisierungsprinzip) 166

3.1.3 Principle of supply of needs (Bedarfsdeckungsprinzip 166

3.2 Social assistance benefit 166

3.3 Social support (Soziale Förderung) 167

Short conclusion 169

Chapter 4: An analysis about the adaptation of German social security law to Vietnam and suggests of reforming Vietnamese social security system 172

I The necessity of reforming Vietnamese social security law 172

1 Socio-economic requirements 172

2 Legal requirements 174

II The adaptation of German social security law to reforming social security law of Vietnam 180

1 Points of view of the adaptation 180

2 The adaptation of experiences of Germany to reforming Vietnamese social security law 182

2.1 The codification of new Social Security Code 182

2.1.1 Drafting general part of Social Security Code 183

2.1.2 The adoption of law of each social security branch 186

(1) The adoption of Health Insurance Law 187

(2) The adoption of Social Assistance Law 188

(3) The adoption of Social Privilege Law 189

2.2 Reforming SIL 2006 190

2.2.1 Voluntary social insurance scheme for farmers 190

2.2.2 Unemployment insurance benefits 192

2.3 Partly privatization of social pension and health insurance schemes 194 2.3.1 Introducing various financing pension benefits mechanism 194

2.3.2 The privatization of health insurance 199

CONCLUSION 201

1 The codification of new social security code 201

2 Reforming SIL 2006 202

3 Resolving financial problems 202

REFERENCES 204

LIST OF ABREVIATIONS

(Arbeitsförderungsgesetz)

Agriculture

Schemes

(Asylbewerberleitstungsgesetz)

(Gesetz über Arbeitsvermittlung und

BErzGG Federal Law on Education (Bundeserziehungsgeldgesetz)

(Behindertengleichstellungsgesetz)

(Bundeskindergeldgesetz)

BSHG Federal Law on Social Assistance (Bundessozialhilfegesetz)

BVerfG Federal Constitutional Court (Bundesverfassungsgericht)

CESRC Covenant on Economic, Social and Cultural Rights

trình xóa đói giảm nghèo)

betreffend die Krankenversicherung der Arbeiter)

MoLISA Ministry of Labor, Invalids and Social Affairs of Vietnam

MPISoc Max Planck Institute for Foreign and International Social

PL-UBTVQH Ordinance of Standing Committee of National Assembly

(Pháp lệnh Ủy ban Thường vụ Quốc hội)

QĐ-TTg Decision of Prime Minister (Quyết định Thủ tướng Chính

phủ)

Recommendation No.67 ILO Income security Recommendation 1944 (No.67)

(Reichsversicherungsordnung)

VSI Voluntary social insurance

I Needs of the research

The need for security against risks in life and against certain positive contingencies constitutes the basis of every social security system in almost countries around the world.1

In social policies of nations, social security thus plays gradually a more essential role in creating the stability and security in the life of population, and then promotes the economic growth and social development In legal aspect, social security right has been largely recognized by international law as one of basic human rights;2 consequently, it is regulated

as one fundamental right of citizens in the national constitution of nations Vietnam is not

an exception

Since 1986, Vietnam has shifted from planned economy to market-oriented economy The

Renovation and open-door policy has brought about changes in different aspects of the

socio-economic life The development of the economy has created favorable conditions for Vietnam to better resolve social problems, including social security.3 Along with the achievements of the economy, the living standard of Vietnamese population has been much improved However, disadvantages of the market economy have also exposed the people to more risks and contingencies This situation has led to a growing need for social security

Moreover, Vietnam has recently accessed to regional and international economic organizations such as Asia Pacific Economic Cooperation (APEC) and World Trade Organization (WTO) Though in principle, labor and social security issues are not directly linked to trade under these organizations, Vietnamese working people are borne the pressures of competition in labor market with the reduction of primary role of formal sector; as a result, the rate of unemployment may increase Also, more favorable environment for trade and investment and greater flow of goods and services may cause social problems in population groups, economic regions and sectors, especially among the

1 Pieters, Danny (ed.), Social protection of the next generation in Europe, Kluwer Law International, 1998,

disadvantaged In addition, the requirement of legal harmonization is also posed a question for Vietnam in integration process to these “playing-fields”.

In 2006, Social Insurance Law (SIL) was enacted to satisfy the above requirements The adoption of this law is in fact a great achievement of Vietnamese legislation SIL 2006 provides a number of new regulations such as voluntary social insurance schemes applying working people in informal economic sectors and unemployment insurance benefit, etc

However, though the adoption of SIL 2006, the current social security system of Vietnam has been existed numerous disadvantages Firstly, Vietnam has still lacked a unified act, in which provides all schemes of the social security system SIL 2006 only provides social insurance schemes to working people; health insurance scheme yet has not been regulated

in SIL 2006 In addition, except social insurance scheme is provided in SIL 20906, other pillars of Vietnamese social security system such as social assistance and social privilege have been still regulated in sub-law documents with the low legal effects Secondly, the structure of social insurance system in SIL 2006 has been unreasonable, especially provisions on unemployment benefit in some extent has still contradicted with existing redundancy and severance benefits provided by employers Furthermore, SIL 2006 has not provided a real effective social insurance scheme for farmers Thirdly, financial problems

in social security system in general and social insurance schemes in particular are big challenges for Vietnam There are many difficulties in maintaining and growing long-term social security funds such as pension and health insurance funds Besides, the situation of evasion of social insurance contributions is problematic in Vietnam Finally, the social safety net has been not really established Meantime, for a country in transition and economic reforms, social safety nets system which aims at short-term and emergency measures is crucially important to support the disadvantaged people in difficult or force majeure situations.4

In order to surmount these disadvantages, the need to reforming social security law is inevitable At first, Vietnam needs to adopt a new unified and comprehensive social security code in order to govern all social security schemes Then disadvantages of SIL

4 Labor and social issues emerging from Vietnam’s accession to the WTO, Report of Ministry of Labor,

Invalids and Social Affairs of Vietnam (MoLISA).

2006 and the finance of social security system should be made good in order to reinforce the effect of the system.

Although such importance of the research, it is noted that there has not been any research which is systematically implemented about this issue in Vietnam so far Vietnam legislators have not much experienced in dealing with the issues, especially in drafting a new social security act Therefore, the possibility to learn from other lands is especially important for Vietnam In addition to that, the process of learning includes beneath the choice and evaluation of the changed circumstances which may be very helpful for the fulfilment of the reforms in the country

II Objectives, study methods and structure of the research

To find out the measures for improving effectiveness of Vietnamese social security law, Germany has been taken into account as a case study of the research The first reason of this choice is that Germany is considered as the “motherland” of social security with more than 100 years of development It means that German social security system is well-structured and it can become a model for the consideration Moreover, reforms on social security system which Germany has initiated over years can bring some lessons to Vietnam, especially measures of resolving financial problems of the social security system built basing on the principle “pay-as-you-go” (PAYG) In addition, Germany had

experienced in successfully codifying the Social Code (Sozialgesetzbuch - SGB) since the

1970s The aim of this codification, according to German legislators, was to simplify, to unify and to clarify social security law, which was haphazardly regulated by numerous separate acts It was hoped that all social security laws could be shaped into one comprehensive system of law in order to promote the citizen’s understanding of the law and thereby their trust in the constitutional welfare state, as well as to simplify the application of the law and to guarantee legal certainty.5 Accordingly, Vietnam is favorable

to learn this model in order to adapt to the legislation process of adopting social security code of Vietnam

For the purpose of the research, analysis and evaluation would be two main study methods Besides, the comparison method is sometimes used Through these methods, both

5 Pieters, Danny (ed.), Social security law in the fifteen members states of the European Union, Antwerpen –

Apeldoorn, Maklu, 1997, p.112.

Vietnamese and German social security system shall be comprehensively examined in theory as well as in practice, so that the necessary assessments for the potential adaptation

of German social security law to Vietnam will be shown

The research is divided into four chapters The first chapter analyzes theoretical backgrounds of social security In this part various definitions of social security are introduced along with issues concerning social security such as basic principles, components of a general social security system and so on The chapter specifically explains how both the terms “social security” and “social insurance” are applied or exist in Vietnam Accordingly, the writer will clarify the concept of social security in the context

of Vietnam Moreover, position of social security law in Vietnamese legal system and relations between it and some other fields of law are also touched upon

The second chapter analyzes the existing social security system of Vietnam as a whole First is a sketch of history of Vietnamese social security Then the development of legislation of each scheme of the system is pointed out The main features of each scheme are also analyzed in depth From this analysis, the disadvantages of each scheme are extracted The conclusion of this chapter will set out a list of required, necessary reforms which should be incorporated into the Vietnamese social security system

In the third chapter, the German overall social security system is stressed Firstly, the research introduces theoretical issues of German social security law Then the development

of German social security law is sketched out with the emphasis on Bismarckian social insurance system Especially, the codification process of SGB is considered and evaluated Then an overview about social security system in Germany with main branches such as social insurance which includes health insurance, accident insurance, pension insurance, unemployment insurance and long-term care insurance, social compensation and social assistance will be presented

The fourth chapter discusses capacities of adaptation of German social security law to reforming the Vietnamese current social security law The socio-economic conditions as well as legal requirements of Vietnam are at first drawn Each problem of Vietnamese social security system is then discussed in considering with equivalent/similar provisions

of German social security law Experiences of German reforms on social security system

are also taken into account and the adaptation of these experiences to Vietnam is examined.

The research concludes by presenting potential suggests to reforming Vietnamese social security law The research is aimed at the fact that the capacity of adaptation of German social security law to Vietnam is in some extent acceptable

Chapter 1: Theoretical backgrounds of Vietnamese social security law

I Concept of social security

1 Definitions of social security

1.1 In narrow meaning

The term “social security” was first officially used in the United States Federal Social Security Act passed by Congress in 1935, in which it meant popularly the federal system of old-age, survivors’, and disability insurance.6 This term appeared again in an act passed in New Zealand in 1938 which brought together a number of existing and new social security benefits.7 It was one again used in 1941 in “Atlantic Charter”, a wartime document.8

After the term “social security” was appeared in the above documents, it has become more familiar with countries around the world through the recognition of this term in a number

of important instruments of International Labor Organization (ILO) The adoption of this term in ILO’s legal instruments was impressed by the value of social security as a simple and arresting expression of one of the deepest and most widespread aspirations of people all around the world.9

According to ILO, social security is understood as “the protection which society provides

for its members, through a series of public measures, against the economic and social distress that otherwise will be cased by the stoppage or substantial reduction of earnings resulting from sickness, maternity, employment injury, unemployment, invalidity, old age and death; the provision of medical care; and the provision of subsidies for families with children”.10 From this definition, the term “social security” was officially used in documents of ILO as public measures in order to protect people from concrete contingencies in their life

6 Introduction to social security, International Labor Office, Geneva, 1984, p.3.

7 The Social Security Act 1938 of New Zealand introduced a new concept - namely, that every citizen had a right to a reasonable standard of living and that it was a community responsibility to ensure that its members were safeguarded against the economic ills from which they could not protect themselves.

8 The “Atlantic Charter” was signed on 14 August, 1941 between Great Britain and the United States As the

fifth item in this Charter was provided: “…to bring about the fullest collaboration between all nations in the

economic field with the object of securing, for all, improved labor standards, economic advancement and social security”.

9 Supra note 6, p.3.

10 ILO Convention 102 of 1952; See also Introduction to social security, International Labor Office, Geneva,

1984, p.3.

Then, the ILO Social Security (Minimum Standards) Convention (No 102) ("Convention 102") adopted is the landmark source in international social security legislation.11 In the absence of previous standards of social security, the temptation is to turn instead to Convention No 102, which sets out nine fundamental benefits, namely medical care, sickness benefit, unemployment benefit, old-age benefit, employment injury benefit, family benefit, maternity benefit, invalidity benefit and survivors’ benefit, that should form the substance of social security, and most importantly establishes institutional thresholds to

be met for their implementation.12

The benefits included in Convention No.102 are a representative range of the contingencies that posed the biggest threat to the economic security of most workers and households in industrial society after World War II De facto communities were thus formed to institutionalize solidarity in the face of common adversities, and to gradually expand to include other risks and other groups, thus opening up the prospect of universal social security.13

However, Convention No 102 was not drawn up to serve as a yardstick for the universal application of this right, and the relatively small number of the states that have ratified it should be enough to deter people from using it in this way.14 If we look at them closely, we can see that despite their apparent flexibility, they are still geared toward a system focused

on industrial workers, which marginalizes most of the population in poor countries Moreover, even if the benefits Convention No 102 provides for are certainly still relevant today, the social needs for which they cater have altered a great deal over the last fifty years, bringing subsequent changes, including changes to prescribed rules This is a limitation of Convention No 102.15

11 Blanpain R et al, International Encyclopedia of Laws: Social security Law, vol.1 ILO 12.

12 Vandenhole, Wouter, Article 26: The right to benefit from social security, Martinus Nijhoff Publishers,

Leiden: Boston, 2007, p.7.

13 Meknassi, R Filali, Social protection and decent work: new prospects for international labor standards:

actors: extending social security in the developing countries: between universal entitlement and the selectiveness of international standards, Comparative Labor Law & Policy Journal, 27 Comp Lab L &

Pol'y J 207, p.210.

14 Introduction to social security, International Labour Office, Geneva, 1984.

15 Meknassi, R Filali, Social protection and decent work: new prospects for international labor standards:

actors: extending social security in the developing countries: between universal entitlement and the selectiveness of international standards, Comparative Labor Law & Policy Journal, 27 Comp Lab L &

Pol'y J 207, p.211.

Nevertheless, as well as laying down criteria in order to establish a minimum standard, Convention No.102 has the advantage in that it sets out a range of fundamental benefits and specifies the groups that should form the focus of national social security policies In general, the purpose of the social security has been described as the protection of persons against certain “social risks” which firstly are provided in Convention No 102 But the number of risks has increased in recent years so that they can now generally be described

as events which may cause loss of income or increase in the demands made upon income.16

Viewed against the background of the changes in its fundamental values and in the actual needs of States which are given a completely free hand to implement it, it becomes a linchpin for the “third generation” of social security standards These standards, together

with all the conventions and recommendations drawn up by the ILO to date, constitute “a

normative framework held together by a unique set of common aims and principles underpinning the social security system”.17

So right in its first appearance, social security was understood as collective remedies against adversity and deficiency.18 The definition of social security has a lot to do with the definition of integrated social development, and its extension is largely an institutional and administrative question If social security in the strictest sense is a series of mechanisms that protect people from need by providing them with care and replacement income if they require it, the clear assumption is that people's basic needs will usually be satisfied through earned income and other public services.19 With the introduction of Social Security Act

1935 of the United States and especially the recognition of ILO in Convention No 102, the term “social security” has been become familiar with many countries around the world only for short time later, although the scope of this term varies from a country to another

Up to now, 42 states had ratified Convention No.102.20 Although Convention No.102 covers nine social risks, each State Party is to comply with at least three of the benefits covered, in which at least one of the following five hard core branches is to be included: unemployment insurance, old-age insurance, employment injury insurance, invalidity insurance or survivor’s insurance.21

16 Euzeby, Chantal, Social security for the 21 st Century, International Social Security Review vo.51, 2/1998.

17 Meknassi, R Filali, Social protection and decent work: new prospects for international labor standards:

actors: extending social security in the developing countries: between universal entitlement and the selectiveness of international standards, Comparative Labor Law & Policy Journal, 27 Comp Lab L &

Pol'y J 207, pp.207-208.

18 Introduction to social security, International Labour Office, Geneva, 1984, p.3

19 Gropman, Larry M., Social Security, Detroit College of Law Review, 1994 Det C.L Rev 871, 1994.

20 Statistic of ILO updated on 01 December 2006.

But the definition of ILO was still criticized by some scholars According to them, it is not really a concept of social security, rather a description regarding the content of intended schemes.22 In an effort to replace this above definition of social security, some of these scholars tried to seek other concepts in more general meaning In one literature, social

security is defined as “benefits that society provides to individuals and households –

through public and collective measures – to guarantee them a minimum standard of living and to protect them against low or declining living standards arising out of a number of basic risks and needs”.23 This concept showed three elements which must be taken into account Firstly, the definition establishes that people derive individual rights and entitlements from social security; secondly, it defines the social element of social security, that is provided within the context of public and collective – an often voluntary- not-for-profit arrangements; thirdly, it makes clear that social security aims at protection, and that its role should not be confused with policies for the promotion of employment and the economy In general, this definition makes the point that social security is concerned not only with a limited range of contingencies, but also with reducing the impact on household budgets of expenditure on basic needs such as medical care, education, housing and food This is a concept of social security in a broader meaning.24

Furthermore, the concept of social security currently is expressed through various models and mechanisms, including social insurance programs, as well as universal systems of social protection In another literature, the term “social security” is defined in two meanings: first, it can be used to denote an objective of government policy; and the second,

it is used to describe a set of policy.25 Currently, references to social security in some countries are to the latter It reflects the lack of emphasis placed in government policy in recent years on the important social objective which the social security system aims to achieve.26

21 Art 2 of Convention No.102 See also Vandenhole, Wouter, Article 26: The right to benefit from social

security, Martinus Nijhoff Publishers, Leiden: Boston, 2007, p.6.

22 Social security law: general principles, Butterworths, 1999.

23 Van Gineken, Wouter, Extending social security: Policies for developing countries, International Labour

Review, vol 142, No.3, 2003.

24 Harris, Neville, Social security law in context, Oxford, 2000, p.4.

25 See Mayers v Adjudication Officer C-116/94 (1996) 1 CMLR 461 and Jackson and Cresswell v Chief Adjudication Officer (1993) 3 All ER 265.

26 Harris, Neville, Social security law in context, Oxford 2000, pp.7-8 See also A.B.Atkinson, Poverty and

social security, Hemel Hempstead: Harverster Wheatsheaf, 1989, p.99.

Some European countries understand social security as consisting of family benefits, social insurance benefits and right to compensation of the cost of health services by the social insurances Characteristically, social security is funded with social insurance contributions, which are aimed to provide cover against the nine “traditional” contingencies, and social benefit claims are treated according to objective criteria, which are based on legislation The conceptual counterpart is social assistance, which is understood as tax-funded, need-based benefits Any in-between benefits (“mixed benefits”) and services do not fit in this conceptual framework.27

Especially, in Germany, the term social security was historically originated from theory of Bismarck about social insurance.28 From 1881, the modern social insurance which is also called as social security later had been instigated by the Prussian Emperor’s program, in which Otto von Bismarck’s Government sought internal cohesion and external strength for the State At that time, only social insurance system with four typical contingencies was introduced, namely sickness (1883), work injury (1884), incapacity for work (1889) and old age (1891).29 In the beginning, social insurance consisted of a number of schemes designed to protect workers against risks Protection, in general, was only given to those who had paid insurance contribution during their working lives: social insurance was therefore an extension into the social welfare field of the concepts and methods of insurance which prevailed in the commercial world.30

The Bismarckian model, started in Germany in the 1880s, was based on compulsory

“social insurance” against a range of ‘contingencies’ that interrupt or end earnings - originally industrial accidents, old age and sickness, and the associated costs of medical treatment Contributions and benefits were related to earnings, as well as to occupations Administration was decentralised Contributions were made jointly by employers and employees to jointly administered ‘social funds’ that paid out benefits Social assistance was not integral to the scheme, and those not in a position to make contributions had no claim on the social funds Rather, they were supported by families, charities and local

27 Van Langendonck, Jef (ed.), The right to social security, Social Europe Series, vol 12, Intersentia,

Antwerpen – Oxford, 2007, p.230.

28 Eichenhofer, Eberhard, The social insurance in Germany: The Bismarck model and its challenge in the 21 st

century, in “Reform and Perspective on social insurance – lessons from the East and the West” (Ming-Cheng

Kuo, Hans F Zacher and Hou-Sheng Chang (eds.)), The Hague, Kluwer Law Internat., 2002, p.19.

29 Ashley, Annie, The social policy of Bismarck, Longmans, Green and Co., 1912.

30 Into the twenty-first century: the development of social security, International Labor Office, Geneva, 1984,

p.17.

arrangements Since the occupational hierarchy is reproduced in the benefit system, the Bismarckian system has been called “morally undemanding”.31

German social insurance model soon attracted other Central European countries to follow suit in the following years, during which the number of acceptable social insurance contingencies grew also.32 Then unemployment insurance scheme was widely accepted as the fifth contingency in most countries before the World War One.33 Due to the millions killed or permanently disabled in the war, disability and loss of the breadwinner were also accepted in Germany as insurance contingencies.34

It can be thus remarked that the term social insurance has been officially used in Germany much earlier than the term social security The change in terminology from social insurance to social security, however, had more than formal significance for it indicated that social insurance benefits were no longer restricted to insured persons but were being made gradually available, as a right, to those who were not members of the workforce.35

Following the Second World War, previously accepted contingencies saw the addition of two new ones: maternity and family The latter was especially influenced by William Beveridge (1942), whose committee had the task of compiling a program of so-called

“social security for all” for social policy in post-war England, many parts of it devoted to the abolition of poverty The content, however, aimed much further, at the establishment of the welfare state.”36 The Beveridgian model, set up in Britain in the 1940s, is best regarded

as a tax-based system of universal entitlement, although this understanding has been clouded now that it exhibits a bewildering array of taxation, insurance and means-testing Benefits were not based on contribution, but on a calculation of physical need They were payable on a flat-rate basis to all that fell into the specified categories Beveridge was keen

to avoid giving the impression of a “something-for-nothing” system, and erected two

31 Skidelsky, Robert, European Welfare Models in Crisis, Essay of Social Market Foundation, 1/1998.

35 Watson, Philippa, Social security Law of the European Communities, Mansell Publishing, London 1980.

36 Van Langendonck, Jef (ed.), The right to social security, Social Europe Series, vol 12, Intersentia,

Antwerpen – Oxford, 2007, p.228.

defences against this As such, the system was more universalist, more vertically redistributive, more egalitarian, more centralist, less generous and cheaper.37

Even Convention No.102 was in essence a compromise between the old “Bismarckian” social insurance for workers and the new “Beveridgian” social security for all.38 With this convention, the ILO incorporated its conventions into a larger instrument, extending to all branches, and providing for a larger coverage, not only industrial workers but of other citizens as well.39

Meantime, some other scholars define social security as “a system of assistance

guaranteed by the state, granted to people in need when their normal source of income has been interrupted or ended (for example through sickness, unemployment or retirement) It could entail assistance to certain disadvantaged groups (for instance the handicapped, the families of deceased workers or people suffering from industrial injuries), or supplementing the incomes of pensioners It could also include social insurance schemes but in a more strict sense of the word it refers to assistance schemes financed from taxation”.40 In this sense, “social security” can be simply understood as benefits which insured persons may receive in case of contingencies that prevent an insured person from earning his or her living, or expose him or her to the emergencies that cause extraordinary strain on limited incomes

Furthermore, while explaining the concept of social security, some scholars also showed a

differentiation between social security and social justness in an effort to more clearly

define the term “social security” If social security is the possibilities that every individual

in society can be assisted to satisfy basic needs in his life in a manner the human dignity, social justness means that every people has equal opportunities to archive and keep individual strength and capacities corresponding their social position in the State and society.41 In this sense, the concept of social justness is much broader than concept of social security

37 Skidelsky, Robert, European Welfare Models in Crisis, Essay of Social Market Foundation, 1/1998.

38 In his report in 1942, Beveridge, a British economist and social reformer, formed a principle of

comprehensive insurance protection for all in Great Britain See also Neville Harris (ed.), Social security law

in context, Oxford, 2000, p.87.

39 Van Langendonck, Jef (ed.), The right to social security, Social Europe Series, vol 12, Intersentia,

Antwerpen – Oxford, 2007, p.7.

40 Social security: general principles, Butterworths, 1999.

41 Schmidt, Alpamann, Sozialrecht 1, 2nd edn., Alpmann und Schmidt Juritische Lehrgänge Verglasges

In general, in the beginning of appearance, the concept of social security was narrowly defined through listing the concrete schemes of social security system And its coverage also narrowed among workers But along with the development of this system, the traditional concept of social security should be extended in order to respond to the realities faced by informal economy workers, who constitute the majority of the world labor force and the all the population But the problem is in case where the concept of social security is expanded, these countries can meet many difficulties to assure the schemes

1.2 In broad meaning

The main development of the concept of social security took place in the 20th century, when social security has been largely recognized by international law as a socioeconomic human right.42 Then it was taken into account by almost nations around the world Toward the end of the 20th century, many nations have extended the concept of social security to cover a variety of contingencies, including sickness, unemployment, old age, employment injuries, maternity, family allowances, invalidity, and death of a breadwinner Social security is a combination between components of public policies It can be governed in order to satisfy needs of workers and citizens in a context of globalization with changes of economy, society and demography which have not existed before.43

Over years, this terminology has developed to have a broader and broader meaning Nowadays, “social security” is often used to point all government programs which designed primarily to help individuals meet the loss of earnings, the absence of income, or the increase in expenditure caused by the birth of children, sickness, accident, disability, unemployment, old age, and death.44 As a result, there are many concepts of social security

which are defined as “the body of arrangement shaping the solidarity with people facing

(the threat of) a lack of earnings (that is, income from paid labor) or particular costs”.45

GmbH &Co.KG, Münster, 2005.

42 Ben- Israel, Ruth, Social Security in the year 2000: Potentiality and Problems, 16 Comparative Labor Law

Journal 139 (Comp Lab L.), 1995, pp 140.

43 Towards New Found Confidence, International Social Security Association, – in “Some concepts and

structure of a modern social security system”, The Labor and Society Magazine, No 284, Hanoi 2005,

pp.47-48.

44 Ball, Robert M., Social security today and tomorrow, Columbia University Press, New York 1978, p.2.

45 Id.

Besides, social security can also mean variable systems covering social risks, which all have in common the fact that they provide certain basic benefits and that a significant proportion of the population contribute to these systems.46

While referring to development of the term “social security” in narrow and broad meaning, scholars and legislators also give various approaches to this concept One of approaches is

to divide social security into “basic social security” (BSS) and “social security for meeting contingencies” (CSS).47

On the one hand, BSS is directly linked to the problem of deficiency of those who are not

in a position to access minimum of resources to meet their economic and social requirements for a dignified life in their society This takes care of human deprivation and vulnerability In terms of BSS, it should be possible to identity the core constitutive elements Here scholars identity four realms of security that could constitute BSS These are: Food security, Health security, Housing security, and Education security In this sense, BSS is also understood as a concept of social security in a narrow meaning.48 In fact, those who enjoy social security today for meeting contingencies are those who have been able to take care of their basic social security

On the other hand, many scholars see that this was also the priority in the history of the evolution of social security policies and arrangements in Western countries where currently CSS is the dominant one but arising out of a situation where basic human deprivations have been taken care of to a large majority of population.49

Some scholars defined social security in the sense that social security was not longer “a

function of the state alone”, but “a partnership between the individual and the state – a

46 Meknassi, R Filali, Social protection and decent work: new prospects for international labor standards:

actors: extending social security in the developing countries: between universal entitlement and the selectiveness of international standards, Comparative Labor Law & Policy Journal, 27 Comp Lab L &

Pol'y J 207, p.210.

47 Kannan, K P., Social security, poverty reduction and development: Arguments for enlarging the concept

and coverage of social security in a globalizing world, ESS Extension of social security, paper No.21,

International Labor Office, Geneva, 2004.

48 Id

49 Kannan, K.P., Social security, poverty reduction and development: Arguments for enlarging the concept

and coverage of social security in a globalizing world, ESS Extension of social security, paper No.21,

International Labour Office, Geneva 2004, p.7.

system built on twin pillars”.50 This opinion became a stone to develop the ideas of privatization of social security system.

In other instruments, the ILO also refers the concept of income security in connection with main component of social security system Income security schemes should relieve want and prevent destitution by restoring, up to a reasonable level, income which is lost due to the inability to work (including old age) or to obtain remunerative work, or by reason of the death of the breadwinner Income security should be organized as far as possible on the basis of compulsory social insurance, and provision for needs not covered by compulsory social insurance should be made by social assistance.51

It therefore can be said that social security indicated a broad view of the objective of state support: from one which was conditional on insurance, and thereby restricted to insured workers, to “a system of social protection for all in poverty and need”.52

In another aspect, social security is identified with “social safety nets” Safety nets and systems for income protection may also, up to a point, be conducive to economic efficiency, since they may enhance political and social stability But, in particular, we have learned over the years that highly selective social policies can make a big difference in the living conditions among the poorest sections of a society, also at a given level of per capita Gross Domestic Products (GDP).53

Nowadays, in many researches, the social protection era has been referred.54 During this phase, the concept of social security was further expanded to provide basic social support for the whole population regardless of contribution or employment history, although both

of these factors remained important.55 This is in fact an ideal scheme Under the social protection approach, participation was no longer restricted to those in full formal

50 Green Paper of South Africa’s Social Security Law (1998), ch.11, para.7.

51 See Income security Recommendation 1944 (No.67) of ILO The Recommendation No.67 mentions invalidity and employment injury as contingencies to be covered by compulsory social insurance It provides that arrangements should be made to take account of loss of earnings due to disability as a condition for entitlement to benefit (para 11).

52 Watson, P., Social security law of the European Communities, Oxford: Mansell, 1980, p.1.

53 Beyond HEPR: A framework for integrated national system of social security in Vietnam, UNDP Policy

Dialogue Paper 2005/1, Hanoi 3/2005, p.13.

54 Id.

55 Generally Social Insurance and Social Protection, Report of the Director-General, International Labour

Conference, 80 th Session (1993).

employment, and was gradually widened to include other labor markets and social groups such as the self-employed, part-time and intermittent workers, and women who had gradually begun to build up individual entitlements to social security independently of their husbands Such an extension of social security implied that society as a whole accepted general responsibility for its disadvantaged members irrespective of cause, and measured its response in terms of needs rather than entitlements In interpreting need, the individual's situation in relation to the community's living standards was considered, as well as generally accepted entitlements to society, such as health care.56 Accordingly, in the social protection era, the concept of social security combines the two principles of solidarity and insurance with limits determined by the nation's social policy.57

The social protection era is the response to an aspiration for security in its widest sense Its fundamental purpose is to give individuals and families confidence that their standard of living and quality of life will not, so far as possible, be completely destroyed by any social

or economic eventuality It is the guarantee of security that matters most of all, rather than the particular mechanisms by which it is achieved Contribution rates have frequently become indistinguishable from general taxes In fact, this scheme is still far from becoming reality, not only in low developed countries but in countries with advanced social security, because the deficit of finance of social security makes many difficulties in expanding social security scheme applying to all the population

The concept and ideals of social security postulate the access of the entire population to social security protection in all possible contingencies.58

In short, from its first appearance with a simple approach, many scholars tried to explain the term “social security” in various ways But it is in fact noted that there is no consensus

in the literature on the definition of social security, and it is really difficult to give an exact definition of social security as well In addition, it is the fact that the effort in clearly defining the term “social security” is really a very difficult work because the term varies in different countries There are, however, some common approaches in meanings of social

56 Ben- Israel, Ruth, Social Security in the year 2000: Potentiality and Problems, 16 Comparative Labour

Law Journal 139 (Comp Lab L.), 1995, p 140.

57 Id.

58 Sankaran, T.S., Subrahmanya, R.K.A & Wadhawan, S.K., Social Security in developing countries,

Har-Anand Publications, New Dehli 1994, p.24.

security Firstly, social security is as a social mean to prevent deprivation (promote living standards); secondly, social security is as a social mean to vulnerability deprivation (protect against falling living standards).59 Yet, it is emphasized that the main purpose of social security is to protect the people from a fall in their standard of living rather than to help them achieve a higher level of the latter In this sense social security has been meaningful in both “protective” and “promotive” aspects While the former focuses on mechanisms to prevent a sharp decline in income, the latter deals with public action to rise persistently low income (improving standard of living).60 Consequently, social security is designed to assistant the people to cope with individual risks, such as sickness, accidents, disability, old ages and death, as well as with collective risks like drought, bad harvests, natural disasters, riot, etc

2 Concept of social security in Vietnam’s perspective

In principle, the purpose of social security is to provide protection against adverse

economic conditions (e.g social insurance, family allowances, social welfare and public health care) and its goal is universal coverage.61 Depending on level of social and economic development, each country decides to promote a narrow or broad social security program; even a number of countries (mostly less developed countries in Asia and Africa) build only social insurance system with limited types of benefits, for instance focusing only on pension and sickness schemes.62

In Vietnam, the term “social security” has been used since 1970s in some researches of scholars of South Vietnam.63 Since 1995, this term is more frequently referred, but it has been only used in legal practice; in legal science, in contrast, it has not been clearly defined and officially used in law documents.64

59 Van Ginneken, Wouter, Extending social security: policies for developing countries, International Labor

Review, vol.142, No.3, 2003.

60 Jütting, Johannes, Social security system in low-income countries: concepts, constraints and the need for

cooperation, Centre of development research, Bonn – Germany, International Social Security Review vol.53,

4/2000, pp 5-6.

61 Cruz-Saco, Maria A., Labor markets and social security coverage: the Latin American experience, WP

No.2, Geneva, International Labor Office, 2002, p.3.

62 Id.

63 Nguyen, Quang Quynh, Labor and social security law, Association of Administration Research, Saigon,

1969, p.205.

64 Dang, Duc San, About the term “social security”, Science Magazine of Hanoi National University –

Economics-Law, vol XVIII, No.1, 2002, p.44.

In the mean time, the term “social insurance” has been more familiar in Vietnam through its appearance in numerous law documents regulating social insurance schemes for working people When referring to Vietnamese social insurance system, a number of foreign scholars have misunderstood to call this system as “Vietnamese social security system”.65 These authors have put forward alternative definitions of social security or social protection intended specifically for conditions in developing countries They shared

a view of social security that extends beyond sudden loss of expected income to include the prevention and alleviation of chronic poverty and the provision of minimum standards

of living.66 But sometimes this international phrase “social security” is still used to refer to social insurance in Vietnam In some extent, therefore, these two words have the same meaning in a narrow sense.67

In fact, the scope of Vietnamese social security system is much broader than that of social insurance Besides social insurance schemes, the existing social security system of Vietnam covers also health insurance scheme, social assistance schemes and social privilege schemes.68 According to Social Insurance Law of 2006 (SIL 2006), health insurance has been fallen outside of the governing scope of this Law.69

The term “social security” has been officially mentioned for the first time in the Resolution

of Ninth Congress of Vietnamese Communist Party, as follows: “It is urgent to expand

social insurance system and social security The social policy for employed persons should

be early set up Need to implement the social policies in order to assure the life of members

of community, including social insurance for employees in all economic sectors, social assistance for persons who meet risks, contingencies…”.70 In this Resolution, both the term social insurance and social security were referred This has been also the first time that

65 Mac, Tien Anh, More discussing about the term “social security”, Social Insurance Magazine No.1, 2004,

p.23.

66 Ahmad 1991; Ahmad and Hussain 1991; Burgess and Stern 1991; Schmidt 1995; Norton, Conway and

Foster 2001; Kabeer 2002; Barrientos and Shepard 2003 See also Mac, Tien Anh, More discussing about the

term “social security”, Social Insurance Magazine No.1,2004, p.23.

67 Pham, Trong Nghia, Some basic issues of social security, Legislation Research Magazine No.8 (81),

social security and social insurance have been considered as two separate concepts in Vietnam.71

From this analysis, the usage of the term “social security” in both legal theory and practice

in Vietnam must be understood in differentiating with the term “social insurance” In this sense, social insurance is only one component of Vietnamese social security system

The policy dialogue on the most appropriate definition of social security for Viet Nam has been useful in that it has helped to raise several key issues First, a distinction must be made between social security and poverty alleviation policies A second and related point

is that the intended beneficiaries of these programs and policies must be explicitly identified Third, attention must be paid to the appropriate role for the state in the provision

of social security programs Finally, the redistributive dimension of social security policy requires careful consideration in the developing country context.72

However, Vietnamese scholars do not try to give an exact definition about social security Instead, they define main components of the social security system Accordingly, the social security system of Vietnam is divided into three main branches, namely social insurance, social assistance and social privilege.73 These branches will be analyzed in more detailed in next parts of the thesis Beside above main branches, social security system of Vietnam includes other regimes, e.g program of poverty reduction, program of health community, various types of savings funds, reserve funds and other insurance forms.74

Although Vietnamese social security system consists of such branches, scholars are aware that an overall system of social security cannot be achieved by applying only the method of social insurance, only method of social assistance, only the method of social privilege, or

so on They nearly find a combination of most varied methods: provident provision under which the size of benefits depends upon the income of beneficiary as reflected in

71 Ngo, Huy Cuong, Social security: fundamental legal matters, Science Magazine, Social science and

Humanity University, vol XVIII, No.1, 2002, p.6.

72 Beyon HEPR: A framework for integrated national system of social security in Vietnam, UNDP Policy

Dialogue Paper 2005/1, Hanoi 3/2005, p.13.

73 Do, Minh Cuong, Social security – a number of theoretical and practical issues and measures of changes,

in “A number of issues about social security policies in Vietnam”, National Politic Publishers, Hanoi, 1993, p.11 See also Pham, Xuan Nam (ed.), Reform of social policy- Basis and solutions, National Politic

Publishers, Hanoi 1997, pp.101-103.

74 Dang, Duc San, About the terminology “Social security”, Journal of Science, Economic – Law, vol XVIII,

No.1- 2002, p.46.

contributions (social insurance); benefits which are defined by their social aims (social welfares and social privilege) and benefits dependent upon a particular cause of loss (social insurance and social assistance).

Social security in Vietnam is understood as a system of policies and measures which are widely applied in order to assist members of society to cope with difficulties when they meet contingencies that lost or reduce their income and provide health care services Accordingly, the modern social security system is designed basing on principles: (1) systematization; (2) has a close linkage with each other in order to assure social justice, especially specifying standard levels of each unit in order to set up a basis for defining benefit levels; and (4) applied for all members in society.75 In broad sense, some scholars define the Vietnamese social security system with three main components: (1) a system of

labor policies and programs of labor market It is considered as a safety tier in all social

security system; (2) a system of social insurance policies It is considered as a spine of national social security system Social insurance creates a long stability for national social security system Therefore, many countries try to design a national social insurance system with a diversification in forms and many levels in order that a biggest number of labor persons can enter this system; (3) social assistance and social privilege system.76

Currently, social security in Vietnam is considered as one of administration methods of the State This management is carried out through legal system, policies and programs of the country Its purpose is to preserve socio-eco-politic stability of the country, to reduce inequality, the gap between rich and poor and the division of society In order to create the sustainable social development, the State should strongly develop social security system to reconcile “social contradictories”.77

The approach to social security chosen by any given country depends on national policy objectives and the specific structural conditions of the economy A number of existing studies touch upon various aspects of social security in Viet Nam.78 Deliberations over the

75 Pham, Minh Duc, Some concepts and structure of modern social security system, Labor and Society

Magazine, No 284, 2006, pp.48-49.

76 Pham, Minh Duc, Some concepts and structure of modern social security system, Labor and Society

Magazine, No 284 & 287, 5/2006, pp.47-48.

77 Pham, Xuan Nam (ed.), Reform of social policy- Basis and solutions, National Politic Publishers, Hanoi

1997, pp.113-114.

78 See ILO 1999a; World Bank 2002; Viet Nam Development Report 2004

design of the next phase of the national program have also refocused attention on social security issues However, a strategy for the future of social security in Viet Nam over the medium to long term founded on a coherent set of policy objectives has yet to emerge.79

This in part reflects the bewildering array of definitions of social security or social protection proposed by international and national institutions, many of which are too broad

or general to be of practical use in Viet Nam.80 Competing definitions reflect not only competing visions of the evolution of social security in Viet Nam but also different interpretations of international experience and its implications for national policy formation

These developments have now posed both theoretical and practical challenges to the concept of social security as collective sharing of costs and benefits to meet situations of deficiency and adversity.81

The theoretical logic for the State involvement in the provision of social security rests on two main grounds The first views social security as a public good, in other words a good

or service that would be under-produced if left to the private sector Only the State can create the necessary incentives to increase the supply of social security instruments, or to compel individuals to take part in compulsory systems In addition, the government has a greater interest in producing and distributing information about economic risks and vulnerabilities than private actors The second justification for state action refers to market failures stemming from poorly formed or absent capital, futures and insurance markets These two theoretical justifications for the role of the State in social security provision are really relevant to countries at Viet Nam’s stage of development in accordance opinions of Vietnamese politicians and policy markers Incomplete capital and insurance markets leave the vast majority of the population exposed to economic risks associated with illness, crop failure, price fluctuations and so forth And since risk is so widespread across all segments

of society the economic, social and political costs can be extremely large from society’s point of view.82 Hence the tendency of reducing the role of the State through the

79 Pham, Duy Nghia, Social security and environmental security- legal policy and initiating suggestions,

Science Magazine of Hanoi National University – Economics-Law, vol XVIII, No.1, 2002, p.35.

80 Ngo, Huy Cuong, Social security: fundamental legal, Science Magazine of Hanoi National University –

Economics-Law, vol XVIII, No.1, 2002, p.9

81 Kannan, K.P, Social security, poverty reduction and development: Arguments for enlarging the concept

and coverage of social security in a globalizing world, European Social Security (ESS), Paper No.21, ILO,

Geneva 2004.

82 Pham, Cong Tru, Social security law in Vietnamese legal system, State and Law Magazine 1/2004,

pp.47-privatization of social security funds seems currently not to be broadly recognized in Vietnam.

In short, in comparison with the common concepts of social security, the concept of social security in Vietnam should be understood in narrow meaning with a structure of three main branches such as social insurance, social privilege and social assistance In the current circumstance of a developing country, it is still difficult for Vietnam to build a universal social security system for all population As a result, social security of Vietnam only focuses on the groups of people in accordance with the priority of needs of assistance.83 In Vietnam’s perspective, the term social security is understood in the broader sense than social insurance Thus this concept covers both contributory both contributory and not-contributory benefits, i.e benefits which are conditional respectively unconditional on the prior payment of contributions.84

3 Roles of social security

The common role of social security is to protect the population from the unexpected risks

in the life which cause loss and reduction of income or threaten the stability of the life of the population

Social security plays a very important role for both working people and the society In this system, social insurance is the most important component Under impact of the market economy, social risks have a tendency to occur frequently and popularly because labor market and business activities of companies always mobilize and face instability and unsustainable These risks make employees more difficult in their life Being one of socio-economic policies of State, social security contributes to assist people who meet vulnerabilities in order that they can overcome them Besides, social security is also very necessary to create the stability of society Right at the beginning of its appearance, social security is recognized as one kind of public services Consequently, activities of social security are considered as those of an “enterprise” where produces insurance services for employees in general.85 In economic perspective, social security is therefore considered as

an important service of the economy

48.

83 Id., p.45.

84 Vandenhole, Wouter, Article 26: The right to benefit from social security, Martinus Nijhoff Publishers,

Leiden: Boston, 2007, p.18.

Social security is also used to redistribute the income In the social insurance system, employers compulsorily contribute to the social insurance funds to assure the insurance right of their employees Besides, employees are also responsible to contribute to the funds Benefits are often provided to insured persons who meet contingencies This number of people, however, is much less than the total of people who enter the compulsory contribution Therefore, social security implements redistribution function in both vertical and horizontal between people who has lower income; more generally between majority of contributors and minority of insurers This is also meaningful in assuring social justness.86

Whatever degree of social and economic inequality exists in reality, it clearly ought to be implicit in social security’s role in guaranteeing economic security that the level of support

is adequate.87 In order to effectively implement its role, social security follows some basic principles which are recognized in both international and national legal instruments

4 Basic principles of social security

The principles of social security at first should be formulated as basic principles which were mentioned in Section 4 of Declaration of Philadelphia.88 Besides of the principle of equality of treatment, the other principle is true of dignity, solidarity, and participation There hence should be at least four on the list, whose meaning and legal scope as regards social security law need to be briefly reviewed: dignity, solidarity, equality, and participation.89 Some basic principles of social security can be mentioned as follows:

4.1 Principle of solidarity

In all countries, when referring to basic principles of social security system, principle of solidarity is always emphasized Although the principle of solidarity created many arguments at the time of its first appearance, this principle is nowadays recognized broadly

in social security law The State has a pivotal role in promoting the principle of solidarity

85 Nguyen, Viet Vuong, Textbook of Insurance Economy, University of Trade Union, Labor Publishers,

Vietnam 2006, p.41.

86 Tran, Van Hung & Mac, Van Tien, Changing social insurance policy for employees, National Politic

Publishers, Hanoi 1998, pp.49-50.

87 Harris, Neville, Social security law in context, Oxford, 2000, p.17.

88 Declaration of Philadelphia was adopted on 10 May 1944, is the current charter of ILO.

89Supiot, Alain, Social protection and decent work: new prospects for international labor standards:

conclusion: the outlines of a framework agreement on the extension of social protection, Comparative Labor

Law & Policy Journal, 27 Comp Lab L & Pol'y J 273, p.276.

The first international Declaration expressly to enshrine the principle of solidarity is the African Charter on Human and Peoples' Rights of June 27, 1981 Whereas the principle of solidarity takes the implicit form in the Universal Declaration of 1948 only of individual rights (right to social security, to an adequate standard of living, to security against the risk

of loss of means of subsistence),90 in the African Charter it is a duty: “the individual shall

have the duty to preserve and strengthen social and national solidarity”.91

Twenty years after the African Charter, the European Charter of Fundamental Human Rights,92 enshrined the principle of solidarity in its turn, albeit with certain new extensions

In this Charter, solidarity covers not just the social rights already referred to in the Universal Declaration, but also new fundamental rights (workers’ right to information, the right of collective bargaining and action, the right of access to placement services) and certain principles that the public authorities and enterprises have to respect (reconciliation

of family life and professional life, environmental protection, consumer protection).93

Naturally, social security schemes embody the organized solidarity between generations and between the working and non-working members of the population Therefore, social security systems in general are based on the ideas of solidarity and cohesion.94

The principle of solidarity is not only applied for social insurance system, but also applied for social assistance scheme and other social welfare schemes In other words, it is generally accepted that solidarity is the basis of the whole social protection concept, like

stated by ILO: “That social security should extend protection to the whole community is a

truism That its protection should be uniform for each section of the community is simple social justice And that the whole community should stand together, non-national residents equally with national residents, to provide this protection is an expression of the solidarity which underlies the whole concept”.95

90 Articles 22 and 15 of the Declaration 1948.

91 Article 29 Cl.4 of the African Charter.

92 The European Charter of Fundamental Human Rights was adopted in Nice in 2000.

93 Ch.4, Art 27 of the European Charter of Fundamental Human Rights.

94 Hutsebaut, M., The financing of social protection in Europe: achieving the Impossible?, Brussels 1996,

p.3.

95 Introduction to Social Security, ILO, Geneva, 1980, p.11.

However, the level of application of solidarity principle is various from the schemes of social security system Social insurance is the scheme that this principle is thoroughly applied In social insurance, the relations between generations and between working people are clearly expressed All kind of the earnings-related benefits which are paid without a test on income or assets are a general feature of contribution system in social insurance In other social security schemes, the financing resources are mostly assured by the State Therefore, a general revenue financed system is more likely to provide flat-rate benefits which may also be means-tested.

The principle of solidarity is first affirmed in some national legal orders that made it the basis for their social security systems The main merit of solidarity is in practice to locate the constructs of social security law on the law of obligations and thus to preserve the principles of equality and individual liberty that any direct reference to these “natural communities” would have endangered Transplanted into social security law, the notion has developed and changed to the extent that, in some countries, it has become the only general principle to which social security is referred This shift from local solidarities based on membership of traditional communities toward broad systems of solidarity under the auspices of the State is a constant in the history of social security systems, as diverse as these systems are In substance, this is the legal translation of the very simple idea that any human society needs cooperation as well as competition.96

4.2 The principle of equality

In the legal sense, the principle of equality refers both to equality before the law, which should apply to everyone equally and should offer the same rights to those in similar conditions, and to equality within the law, which in some cases prohibits the legislature itself from taking account of certain actual or supposed differences such as race, gender, religion, nationality, trade union membership, etc.97

In social security, the principle of equality means in principle that the same rights must be given to those who, regardless of gender or nationality, have the same burdens and are

96Supiot, Alain, Social protection and decent work: new prospects for international labor standards:

conclusion: the outlines of a framework agreement on the extension of social protection, Comparative Labor

Law & Policy Journal, 27 Comp Lab L & Pol'y J 273, pp.281-282.

97 Social security law: general principles, Butterworths, 1999.

exposed to the same risks, but it also means that those who do not have the same resources must not be subject to the same obligations This interpretation of equality is also the only one that is consistent with the principle of solidarity One of the effects of the principle of solidarity is that it ensures that access to certain fundamental benefits is not subject solely

to the discrimination legitimized by competition law: discrimination on the basis of money.98

4.3 The principle of participation of those protected

The principle of participation of those protected stems first from the Declaration of

Philadelphia, which calls for “the collaboration of workers and employers in the

preparation and application of social and economic measures”.99 This requirement is also found in the “new consensus” reached by the International Labor Conference in 2001,

which states that “in order to be effective, initiatives to establish or extend social security

require social dialogue” (Sec 16), and which gives the ILO the task of helping the social

partners “to participate in policy development and to serve effectively on joint or tripartite

governing bodies of social security institutions” (Sec 19) It is also evident from the

common provisions of Convention 102, which state that where social security is not

directly managed by the State, “representatives of the persons protected shall participate

in the management, or be associated therewith in a consultative capacity, under prescribed conditions; national laws or regulations may likewise decide as to the participation of representatives of employers and of the public authorities” (Art 72) A number of useful

points can be inferred from these various provisions

The concept of "person protected" used by the Convention l02 should be understood to

include anyone encompassed by the links of solidarity that make up the fabric of the social security system, in other words anyone contributing to it and able to benefit from it.100

Besides basic principles above, there are also some other principles which govern the implementation of social security schemes Generally, these principles assure effects of the implementation of the social security schemes

II Social security system

98 Id.

99 Section III (e) of Declaration of Philadelphia.

100 Introduction to social security, International Labor Office, Geneva, 1984.

1 The coverage

Social security coverage shows all people who are covered by social security schemes This coverage therefore varies from different countries, depending on development level of each country The purpose of social security is to implement society equality, expand solidarity tradition and compassionate spirit Therefore, social security should be applied to all members of community in order to protect them from contingencies or risks which make reducing or losing their income.101

In every country, social security benefits are basically provided at first for employees and their family basing on their contribution into social security funds Besides, employers also contribute to social insurance funds and the State supports if necessary This creates a tri-partite mechanism in the contribution

The coverage of social security is also different from countries For instance, in the United States, the term of “social security” refers to the federal social insurance systems, and to state benefits and other form of social welfares;102 or in Denmark, the alleviation of poverty forms the basis of social security policy103, etc General speaking, the coverage of social security of one country which is narrow or wide expresses the level of development about social security system of that country However, this should not be seen as an obstacle in the way of universal consensus concerning the concept and definition of social security, but as a measure of assisting when interpreting the concept

In most parts of the world, those covered by social security are a small subset of the economically active population Only in the developed countries does social security coverage typically extend to the great majority of the work force and, even here, protection tends to be limited for hard-to-cover groups such as farmers and the self-employed.104

Social insurance is always the most important pillar of the national social security system However, social insurance coverage varies from each country depend on its level of development However, with the limitation of compulsory social insurance, many countries

101 Gropman, Larry M., Social Security, Detroit College of Law Review, Det C.L Rev 871, 1994.

102 Pennings, Frans (ed.), International social security standards: current views and interpretation matters,

Social Europe Series, vol 14, Intersentia, Antwerpen – Oxford, 2007, pp.36-37.

103 Social security: general principles, Butterworths, 1999.

104 Fultz, Elaine, and Stanovnik, Tine (eds.), Collection of pension contributions: trends, issues, and

problems in Central and Eastern Europe, Budapest, International Labor Office 2004, p.39.

often exclude the self-employed and various categories of workers in the informal economic sector as well as farmers from the compulsory coverage.105 In these countries, social insurance provided by the State only covers most of labor force in the organized sectors of public and industrial employment However, in developed countries, this coverage is larger than that in developing countries In developing countries, in contrast, the vast majority of unorganized rural population and people in the informal economic sector are left out from the compulsory social insurance coverage.106

In general, where compulsory social insurance coverage is provided by law, actual coverage is in most cases low Employers also contribute to social insurance funds together with employees The compulsory social insurance fund is therefore established basing on the contribution of both employees and employers and the support of the State It is very difficult to apply this compulsory social insurance scheme to the people who has not a labor relationship such as self-employed workers and workers in the informal economic sector and agriculture workers There are some reasons to explain this situation: first, since there are no employers, employees must contribute to social insurance fund with a higher cost; second, this group of workers does not have stable income Hence, it is very difficult

to apply the compulsory social insurance scheme for this group.107

With the function of the largest international organization dealing to labor issues including social security, ILO has been recently developing a program called “social security for all”.108

One of the most important tasks of this program is to do research to find out social insurance forms suitable for groups of people in various countries, especially developing countries Plans for expanding social insurance coverage are also discussed.109

Social security protection evolved under a strong model of insurance that was employment-related, with mandatory payroll contributions from the insured employee, the employer and government Generally, the system was organized under a publicly

105 Sankaran, T.S., Subrahmanya, R.K.A & Wadhawan, S.K., Social Security in developing countries,

Har-Anand Publications, New Dehli 1994.

106 Ball, Robert M., Social security today and tomorrow, Columbia University Press, New York 1978.

107 Cruz-Saco, Maria Amparo, Labor markets and social security coverage: the Latin American experience,

Working Paper No.2, Geneva, International Labor Office, 2002.

108 Conclusion about social security in the 89th Session of the International Labor Conference (ILC) in June 2001.

109 Van Ginneken, Wouter, Extending social security: policies for developing countries, International Labor

Review, vol.142, No.3, 2003.

administered national social security institution that provided benefits to the insured workers and their dependants.110

However, it is also difficult to design such a social security scheme in all countries, especially in low-income countries Whereas, in the industrialized nations, more than 90%

of the population is covered by various forms of state or market- organized social security system, in developing countries, despite considerable effort on the part of policymakers, development institutions and donor agencies, well over 50 per cents of the population remains uncovered against basic risks.111 This situation posed a question to expand the coverage of social security in these countries through various measures and polices, in order that all population can enjoy benefits provided by this system

2 Benefits

Each nation, basing on its concrete socio-economic conditions, defines components of social security system applied for citizens in its territory In other words, the scope of social security system depends on social policies of each country

Initially there were separate schemes for different occupations and industries Civil servants were among the first beneficiaries of social security schemes Then ILO defined various strands of social security, as follows: social insurance, social assistant, benefits financed by general revenue, family benefits, and provident funds, together with supplementary provisions made by employers, and the ancillary and complementary programs which have developed around social security.112

Among these components, social insurance plays the most important role in social security system On the way towards the radical transformation of the life of the common man through assurance, social insurance was thought of as the first essential pillar of social security.113 And this scheme exists in almost countries around the world There are differences between one scheme and another but the principle elements of social insurance

110 Cruz-Saco, Maria Amparo, Labor markets and social security coverage: the Latin American experience,

Working Paper No.2, Geneva, International Labor Office, 2002, p.2.

111 Jütting, Johannes, Social security system in low-income countries: concepts, constraints and the need for

cooperation, Centre of development research, Bonn – Germany, International Social Security Review vol.53,

4/2000, p 3.

112 Introduction to social security, International Labor Office, Geneva, 1984, p.3.

113 Id., p.19.

may be set out as follows: first, social insurance is financed by contributions which are normally shared between employers and workers, with, perhaps, state participation in the form of a supplementary contribution or other subsidy from the general revenue; second, participation is compulsory, with few exceptions; third, contributions are accumulated in special funds out of which benefits are paid; fourth, surplus funds not needed to pay current benefits are invested to earn further income; fifth, a person’s right to benefit is secured by his contribution record without any test of need or means; sixth, contribution and benefit rates are often related to what the person is or has been earning; and finally, employment accident insurance schemes are usually financed wholly by employers, with the possibility of state help from general revenue.114

In the world, the initial emphasis in most countries was on occupational accidents, sickness and pensions Enterprises were increasingly required to pay compensation to employees who were injured at work Although social insurance was officially created in Germany during period of 1883 and 1889, early of 1850s several German states had helped local governments to set up sickness funds to which workmen could be compelled to contribute.115

Then other benefits were implemented, such as employment injury insurance (1884), invalidity and old-age insurance (1889) Then the first unemployment insurance scheme was introduced in France in 1906 Maternity benefits were also included in many social insurance schemes, etc

Although there are different concepts of social insurance from different countries, one factor largely accepted is that social insurance provides benefits for people who meet contingencies during working process The contingencies covered were usually limited to injury, sickness, maternity and pensions; there were differential systems for different occupations and categories of workers, a multiplicity of institutions and most important, limited coverage of the population Unemployment benefits, family allowances and social assistance existed in relatively few countries or had extremely limited coverage In general, there was a certain correlation between the development of the national social security system and the degree of economic progress Countries with a higher per capita income and a larger proportion of the working population in formal sector employment tended to have more extensive social security expenditure.116

114 Id., p.4.

115 Id., p.3.