The Council of Labor Affairs (CLA) yesterday announced that based on its latest estimation, the Labor Insurance Fund will see a deficit and be bankrupt in the next 20 years causing labours panic and blamed that it was government’s fault. According to this issue, the government confirmed that the fund would not be bankrupt in the next 5 years and the government has been working for a solution to prevent this problem.
Besides, the government will revise the Labour Fund Act and improve the different legal process system of each fund namely Labour Insurance Fund, National Pension Fund, and Civil Servant Insurance Fund in order to get benefits most equally. In this regard, the member of central committee suggested the government to discuss with representative of Labour Union in order to create mutual understanding. Meanwhile, president of CLA committee stated that CLA would protect labour benefits and ensured the security of the funds.
Following to this news, Applicants for old-age benefits have increased more than 50 percent in recent days after the government warned that the Labor Insurance Fund could go bankrupt in a decade. Most recipients have chosen to receive the payment in one lump sum instead of the other option of monthly installmentsurged the public to remain calm, and stated that some who chose to receive the payment in one lump sum might have later come to regret their decision.“Claiming the payments on a monthly basis is more economic than receiving the total amount at one time,” the bureau said.
The fund still possesses a stock market value of more than NT$530 billion so the insured shouldn’t panic since labor insurance is a social welfare program to protect workers,and thus the government will take full responsibility for reaching a solution.
Old-age benefits are part of an insurance plan that can be claimed by workers who are over 60 and have had insurance coverage for more than 15 years. Workers can also choose to postpone claims or apply for the payments in advance.
The threat of losing one’s old-age benefits began appearing this month when the CLA announced the Labor Insurance Fund might go bankrupt. Panic surrounding the issue intensified when the government proposed an amendment that would shrink future benefits, sending applicants scrambling to collect their payments. According to the bureau, the number of phone calls to the office since last week has exploded, with a 50-percent increase in daily callers to the information counter. According to the bureau, no matter how the government finalizes amendments regarding the labor fund, receiving the payment on a monthly basis will always be more economical. An official recalled a related incident in 2008 when many people decided to collect a lump sum payment for fear of losing their benefits. The official of CLA further stated that many people have come back to the council wanting to change back to a monthly payment, but the bureau could not make the changes under the regulations
