Eligibility procedures hamper access to $2.6-billion pandemic relief package

According to the Ministry of Labor, Invalids and Social Affairs, as of May this year, only VND13.1 trillion of a VND62-trillion ($2.6-billion) support package that Vietnam had announced in April last year to help the poor as well as businesses hit by the pandemic had been disbursed to help 13.2 million people.

The package aims to support six categories of individuals and businesses.

Those having lost their jobs due to the Covid-19 crisis for 14 days or more would get a monthly allowance of VND1.8 million.

Part-time workers who were unemployed but have not received related benefits would get a monthly allowance of VND1 million.

Poor and near-poor households would receive VND250,000 per month while those with a record of meritorious services to the nation would get VND500,000 per month.

Household businesses with revenues below VND100 million a year and have had to suspend operations due to the Covid-19 pandemic would be supported with VND1 million per month.

Businesses that suffered financial difficulties as a result of Covid-19 would be allowed to borrow money from the Vietnam Bank for Social Policies at zero percent interest to pay their employee salaries for three months. The loans would cover a maximum of 50 percent of the local minimum wage, with businesses responsible for paying the remainder.

Local authorities would be in charge of building lists of those in need and disbursing the funds to them.

The ministry said the authorities have "encountered difficulties" in placing informal workers on the list of those suffering financial impacts by the pandemic.

Many people who lost their jobs had yet to sign a contract with their employers and would not be eligible for relief.

On the other hand, "many localities have been way too careful and spent more time than needed to review the list of those eligible for the aid," the ministry said.

In some cases, some have asked for the completion of far too complicated administrative procedures, creating obstacles for many people in accessing the package, it said.

Besides, when the package was studied in March last year, Covid-19 had not been controlled in Vietnam and it was forecast that the pandemic could last until June 2020 and the number of people affected would be around 20 million.

However, Vietnam managed to bring the pandemic under control by the end of May 2020, and therefore all measures to curb infections, including social distancing orders, had been removed, putting businesses back on track. This further complicated the issue of disbursing the package’s funds.

Many workers and businesses were only allowed to get the support fund for April. However, since the procedures were very difficult and the amount was low, many decided not to apply for it.

As for the zero-interest loan package of VND16 trillion, only 245 businesses have borrowed VND42 billion, while many others have complained that the loan conditions are too tight and the principal amount too low.

The ministry said the support package was unprecedented and the support group is wide, spread over all economic sectors, but it only had had less than three weeks to study and issue the policy and did not have enough time to collect feedback and conduct reviews.

Dang Thi Kim Chi, chairwoman of the labor union at the Vietnam Singapore Industrial Park in Binh Duong Province that borders HCMC, said many companies at the park had stopped operations and really desired the support, but the complicated procedures have prevented them from seeking help.

Only five companies applied for relief under the package and none of them was chosen. They were asked to fulfill some additional terms and conditions, including paperwork to prove their financial abilities, forcing them to spend more time and effort on completing the procedures. In the end, they gave up and not a penny was obtained from the support package.

Le Duy Binh, CEO of Economica Vietnam, said some requirements set for businesses to get support were "strict and unreasonable."

For example, he said, in order to borrow from the zero-interest package, businesses have to prove that they had made more than 20 percent of their employees stop work for over a month, and those employees must have already signed contracts and paid social insurance.

Vietnam is about to release another support package worth VND26 trillion, and both Binh and Chi suggested that authorities learn from shortcomings of the first package to make the second one more accessible to people and businesses in need.