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Implementation Opinion of the Guangdong Provincial Department of Human Resources and Social Security, Guangdong Provincial Healthcare Security Administration, Guangdong Department of Finance, and Guangdong Provincial Tax Service, State Taxation Administration on Temporary Reduction and Waiver of Enterprise Social Insurance Contributions
Update:2021-05-25    Source: ​Guangdong Provincial Department of Human Resources and Social Security

Yue Ren She Gui [2020] No. 58

To People’s Governments of cities at or above the prefecture level:

  In order to implement the Notice of the Ministry of Human Resources and Social Security, Ministry of Finance and State Taxation Administration on Temporary Reduction and Waiver of Social Insurance Contributions by Enterprises (Ren She Bu Fa [2020] No. 11) and the Guiding Opinions of the National Healthcare Security Administration, Ministry of Finance and State Taxation Administration on Temporary Reduction of Contributions to Basic Medical Insurance for Employees (Yi Bao Fa [2020] No. 6), with the approval of the Guangdong Provincial People’s Government, the following implementation opinion concerning the temporary reduction and waiver of enterprise social insurance contributions in Guangdong Province is hereby issued for your due implementation.

  1.Temporary reduction and waiver of enterprise contributions to old-age insurance, unemployment insurance and work injury insurance

  1.1 Scope of application

  Temporary reduction and waiver of employer social insurance contributions apply to enterprises that have completed enrolment and payment registration, individual industrial and commercial proprietors enrolled in the insurance system as enterprises, and all socialorganizations and private non-enterprise organizations (hereinafter referred to as “employers”). In accordance with regulations, these entities shall enjoy policies regarding the reduction and waiver of enterprise contributions to old-age insurance, unemployment insurance and work injury insurance (hereinafter referred to as “social insurance contributions”). Reduction and waiver policies do not apply to individual contributions. These policies also do not apply to government agencies, public institutions, and persons enrolled in the insurance system in their personal capacity.  

  1.2Classification of enterprises

  Enterprises are classified by social insurance contributions collection agencies according to the list confirmed by relevant government authorities based on theNotice Regarding the Issuance of Regulations for the Classification Standards for Small and Medium Enterprises (Gong Xin Bu Lian Qi Ye [2011] No. 300) and the Notice of the National Bureau of Statistics on the Issuance of Measures for Classifying Micro, Small, Medium and Large Enterprises for Statistical Purposes (2017) (Guo Tong Zi [2017] No. 213). Employers who object to their enterprise classification may submit information on their industry, operating income and total assets in 2019 as well as their actual number of employees as of December 2019 to the local social insurance contributions collection agency before the end of March 2020. The social insurance contributions agency will verify the information, reclassify the enterprise, and adjust and confirm the proportion of social insurance contributions to be reduced or waived.

  1.3Implementation period and reduction/waiver measures

  Micro, small and medium enterprises and individual industrial and commercial proprietors participating in the insurance system as enterprises, which meet the requirements for enjoying waiver policies after classification, shall be exempted from contributions from February to June 2020. Large enterprises and other entities will have their employer contributions reduced by half from February to April 2020. The implementation period of reduction and waiver policies is the contribution period.

  New engineering construction projects starting between February 1 and June 30, 2020 may enjoy the policies for the temporary reduction and waiver of social insurance contributions in accordance with national regulations.

  1.4 Enjoyment of reduction and waivers and declaration of business activities

  During the temporary reduction and waiver of social insurance contributions, employers shall still make declarations and payments to the relevant social insurance contributions collection agency and duly fulfil their obligation to withhold and pay individual contributions due from their employees. Entities that meet the requirements for reduction and waiver will automatically enjoy the policies for temporary reduction and waiver of social insurance contributions during the payment declaration phase without the need to fill out forms or file applications. Social insurance contributions paid after February 1, 2020 will be refunded to employers who meet the requirements of reduction and waiver policies.

  During the implementation of temporary reduction and waiver policies, employers that remain unable to pay social insurance contributions for their employees after enjoying said reduction and waiver policies may defer their payments in accordance with the provisions of theNotice of the Guangdong Provincial People’s Government on the Issuance of Policies and Measures for Further Stabilizing and Promoting Employment in Guangdong Province (Yue Fu [2020] No. 12) and the Notice of the Guangdong Provincial Department of Human Resources and Social Security and Guangdong Provincial Tax Service, State Taxation Administration on Work Related to Social Insurance Contributions and Benefits During the Period of COVID-19 Containment (Yue Ren She Han [2020] No. 24). Enterprises facing severe difficulties in production due to the impact of the pandemic may apply to defer the payment of social insurance contributions. In principle, the period of deferral shall not exceed 6 months and no late fees will be levied during the deferral period.

  For employers that enjoy the policies for reduction and waiver of social insurance contributions, the payment of their employees’ individual contributions may also be deferred. The individual contributions that should have been paid by insured persons during the deferral period shall be deposited into their personal accounts after back payments are made. Interest will be duly calculated.

  1.5 Issuance of benefits

  All social insurance benefits enjoyed by insured persons according to law during the pandemic will be disbursed normally by the social insurance agency.

  1.5.Old-age insurance benefits. If employees’ individual contributions are paid normally, social insurance agencies shall disburse old-age insurance benefits on time and in full. If payment of employees’ individual contributions has been deferred, social insurance agencies shall calculate and disburse old-age insurance benefits to insured claimants based on their pre-deferral payment situation and then recalculate the benefits after deferred contributions are paid. After back payments are made, employees shall be deemed to have made continuous contributions. Old-age insurance benefits will be recalculated and the difference will be retroactively disbursed. Employers may give precedence to the payment of old-age insurance contributions for employees who have reached retirement age.

  1.5.2 Work injury insurance benefits. For employers that have completed enrolment and payment registration, and are entitled to reduction, waiver or deferral of work injury insurance contributions in accordance with regulations, social insurance agencies shall disburse work injury insurance benefits in accordance with regulations to their insured employees who suffer work injuries during the period of policies for the reduction, waiver or deferral of work injury insurance contributions.

  1.5.Unemployment insurance benefits. During the period when employers are entitled to reduction, waiver or deferral of unemployment insurance contributions in accordance with regulations, if employees meet the relevant requirements and apply for unemployment insurance benefits, social insurance agencies shall disburse benefits in accordance with regulations. Relevant parties shall be deemed to have made continuous contributions during the deferral period.

  1.6 Fund support

  In accordance with the principle of guaranteed disbursement and full allocation, allocation arrangements with respect to provincial-level pooling funds will be strengthened to provide support for municipalities where enterprise old-age insurance funds and work injury insurance funds face funding gaps to ensure the on-time and full disbursement of benefits. All localities shall make sound use of cumulative balances in unemployment insurance funds to fill funding gaps arising from the implementation of policies regarding the reduction, waiver and deferral of contributions, and ensure the on-time and full disbursement of unemployment insurance benefits and expenses for promoting employment.

  2.Temporary reduction of contributions to basic medical insurance for employees

  2.1 Employer contributions to medical insurance for employees will be reduced by half 

  From February to June 2020, employer contributions to medical insurance for employees can be reduced by half in pooling districts where cumulative balances in employee medical insurance pooling funds can sustain disbursement of benefits for six months or more. In pooling districts where temporary reductions have been implemented, employer contributions to medical insurance for employees will be collected at 50% of the rate applicable before the temporary reduction of contributions. In pooling districts where temporary reductions have not been implemented,  employer contributions to medical insurance for employees will be collected at 50% of the prevailing rate. The policies for temporary reduction of contributions specified in theNotice of the Guangdong Provincial People’s Government on the Issuance of Policies and Measures for Further Stabilizing and Promoting Employment in Guangdong Province (Yue Fu [2020] No. 12) will not be concurrently implemented during the period of reducing contributions by half. During the implementation of the reduction-by-half policy, the implementation of the policy will be ceased in pooling districts where cumulative balances in employee medical insurance pooling funds can only sustain disbursement of benefits for less than six months.

  2.2 Policies for temporary reduction of contributions will continue to be implemented after the end of the reduction-by-half policy

  After the end of the reduction-by-half policy, policies for temporary reduction of contributions may continue to be implemented until April 30, 2021 in pooling districts that meet the requirements for reduced contributions set out in theNotice of the Guangdong Provincial People’s Government on the Issuance of Policies and Measures for Further Stabilizing and Promoting Employment in Guangdong Province (Yue Fu [2020] No. 12) and the Notice Regarding Several Policy Measures for Further Promoting Employment in Guangdong Province (Yue Fu [2018] No. 114). In pooling districts where policies for temporary reduction of contributions have already been implemented, the prevailing reduction rates will be retained. In pooling districts where these policies were not implemented, the rate of employer contributions to medical insurance for employees will be reduced by 0.5 percentage points.

  2.3 Implementing payment deferral policies during the COVID-19 pandemic

  For those unable to pay the contributions to medical insurance for employees (including maternity insurance) on time due to the impact of the COVID-19 pandemic, timely adjustments shall be made to the medical insurance information system to ensure that insured persons can enjoy benefits in the current period. Payment deferral policies may continue to be implemented (for no longer than 6 months in principle). Late fees shall not be levied during the deferral period. Healthcare security agencies shall duly record individualsocial insurance benefit credits to ensure that the benefit credits of those making back payments are not affected.

  3.Management services

  All localities shall properly carry out work on the statistics and documentation of individualsocial insurance benefit credits of insured persons during the period of reduction, waivers and deferral, strengthen data monitoring, and analyze data properly. All localities shall urge enterprises enrolled in the insurance system to make truthful declarations of social insurance contributions to facilitate the accurate calculation of reduction and waiver amounts, prevent entities enrolled in the insurance system from making false declarations, incomplete declarations or failing to make declarations, and ensure that the benefits of insured persons are not affected. All localities should remote processing of public social insurance services, encourage entities and individuals to handle social insurance matters and check progress and outcomes online, and reduce in-person processing. All localities should strengthen IT support, give priority to services needed for COVID-19 containment, make timely adjustments to transaction information systems to ensure their smooth operation. All localities should strengthen risk management, conduct timely audits and inspections, and focus on monitoring fraudulent acts by enterprises to qualify for reduction and waivers through means such as splitting and establishment of new entities.

  4.Work Requirements

  The temporary reduction and waiver of social insurance contributions is a major initiative by the CPC Central Committee and the State Council to coordinate COVID-19 response and economic and social development, help enterprises tide over difficulties and stabilize employment. All localities must enhance their political stance, intensify their awareness of the big picture, accurately and thoroughly grasp the national and provincial reduction, waiver and deferral policies, formulate local work plans, and ensure the effective implementation of the policies. All human resources and social security, medical insurance, finance, and taxation authorities, as well as social insurance agencies, shall duly perform their duties, strengthen communication and coordination, promptly address problems encountered in the course of work, and make a good job of good things. All localities shall take the initiative to interpret the policies, strengthen publicity and guidance, and give full play to the effect of the policies. All localities should promptly report specific issues encountered during the course of implementation period to the Guangdong ProvincialDepartment of Human Resources and Social Security, Guangdong Provincial Healthcare Security Administration, Guangdong Provincial Department of Finance and Guangdong Province Tax Service.

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