Chinese authorities plan to introduce a blacklist system by the end of the year that specifically targets those who pocket social security benefits, China News reported Tuesday.
Under the new rule, individuals or companies involved in social insurance misconduct — such as refusing to pay insurance fees and benefits, forging certification materials, and illegally trafficking personal data — could be barred for up to five years from working at public offices and traveling by plane or train, according to the report. China’s Ministry of Human Resources and Social Security first published the draft guideline on Oct. 16 to gauge public opinion.
China’s social insurance system includes several components — such as pensions, medical insurance, work-related injury insurance, unemployment insurance, maternity insurance, and a housing provident fund — which employers are required to cover by law. Loopholes in social insurance levies, as well as individual fraud cases, have contributed to widening the pension-fund deficit, leaving millions of social security-dependent senior citizens in harsher conditions.
Chinese enterprises are also part of the problem, as more and more companies increasingly shy away from their insurance responsibilities. More than 70 percent of companies failed to pay state-mandated social insurance premiums for their employees, and 32 percent of them only paid the standard minimum, according to a report published this year by an independent social insurance agency. In August, a court ordered Changzhou Yuhua Glass Co. Ltd. to pay social insurance worth over 2 million yuan ($290,000) in arrears after they were found not to have provided it to their employees.