Some Foreigners share their take on China’s social security system, and the challenges they face trying to access benefits.
Although they contribute to China's social security system, most foreigners working in China do not understand or know how to use the benefits. Photo: IC
Stephanie Tebow, a counselor at Harrow International School in Beijing, has been contributing to China's social security system for as long as she has been living and working in Beijing, just like any other Chinese resident.
"It's mandatory for foreigners living in Beijing, so it's automatically taken out of my salary along with taxes. It adds up to about 20-25 percent of my overall salary," Tebow said.
However, according to Tebow and other foreigners Metropolitan spoke to, they do not use the Chinese social security that they pay for because it is inconvenient and they do not know how to use it or what they paid for.
In this article, Metropolitan will introduce the basics of China's social security system for foreigners, the newest policies and expat's opinions on social security in China.
China's social security for foreigners
Although Sofia (pseudonym), from the US, has been working in Beijing for two years and is contributing to China's social security system, she does not have a clue what she has been paying for.
"I don't know much about the Chinese social security system, and I have never used it. So, I have no idea how useful it is for foreigners," she said.
There are many challenges that block foreigners from utilizing China's social security system. Photo: IC
"I think medical insurance comes out of my pay every month, but I don't know about other fees. I just know that 20 percent of my salary goes toward taxes and other things," Sofia said.
However, Sofia does acknowledge that paying for social security in China is just as important as paying for it in her home country.
It is good to have the money drawn from your pay because since you are here, you are a member of this country now, Sofia said.
Besides if in the future you do decide to live here for the rest of your life, you will have something to rely on since you have been putting money into social security, she added.
"I just wish that there was a way to find out more or a program that could educate expats on how to utilize or understand what the social security and taxes in China are used for and how it can benefit them," Sofia said.
Iris Kuijken, a lawyer from Buren Legal, a Dutch law firm with offices in Shanghai and Beijing, explained the details for foreigner's participation in China's social security system.
According to Kuijken, Chinese laws require foreigners working in China to participate in social insurance schemes. However, different regions apply different provisions.
"In general, the employer and the foreigners shall pay five premiums: basic endowment insurance (pension), basic medical insurance, unemployment insurance, maternity insurance and work-related injury insurance," Kuijken said.
However, Kuijken noted that, in practice, there are no unemployment benefits for foreign employees in China, as foreigners not employed will not be permitted to continue living in the country.
The above rules do not apply for expats in regions like Shanghai, which has not adopted these national standards. Therefore, it is not mandatory for foreign employees in Shanghai to contribute to social insurance.
As for foreigners who decide to move out of China, their money has not been spent in vain.
"If the social insurance relationship is terminated with a written application from the foreigner, the deposit amount of the individual's social insurance account will be paid to the foreigner in a lump sum," she said.
Other than the five social insurances, there is a Housing Fund in China. The fund allows employees to save money toward buying property or renting a house. The employer and employee will make equal contributions to the account, which is usually between five and 25 percent of the employee's annual income from the previous year, according to an article from China Briefing, a site dedicated to bringing practical technical information to investors.
However, the Housing Fund can only be withdrawn to make a down payment, purchase a property, conduct construction or renovations on a property or to pay back a mortgage.
According to the Measures for Entitlements of Foreigners with Permanent Residency in China, which was issued in 2012, foreign employees with a permanent residency can use their Housing Fund like Chinese employees. Foreigners without a permanent resident visa can still withdraw the money and the procedure is the same as Chinese employees, according to the official website of the Beijing Housing Fund Management Center.
Not easy to maneuver
For Tebow, although she has been paying social security for the past 10 years, she has not learned how to benefit from it.
When she goes to local hospitals, she is automatically sent to the international department, which is usually paid for separately. Therefore, she always pays in cash or uses a foreign insurance policy she bought that covers general consultation, prescriptions and major surgeries in international hospitals or a local hospital's international department.
"I pay into the Housing Fund every month, but I am not allowed to use it since I am not a Chinese citizen or hold a Chinese green card. I can't use it to rent an apartment, and I don't know if I can use it to buy a house since I haven't asked about it before," Tebow said. "It's just not very useful to foreigners."
There are some rare cases Tebow observed where foreigners can utilize the social security system. She said one of her friends works for a Chinese employer in Beijing and she pays Chinese social security based on her taxes.
She will go to local Chinese hospitals without an international department and pays for her treatment and medicine first, and then her employer reimburses her.
"Her employer helps her communicate with the Chinese doctors and takes care of the reimbursement process," Tebow said. "The Chinese hospitals she went to were all very good, clean, had highly skilled surgeons and the nurses even helped her order food."
However, in most cases, foreigners have frustrating experiences using the Chinese social security in local Chinese hospitals.
"Because we can't communicate with the doctors and other hospital staff, it's very challenging for us to see doctors, let alone figure out the Chinese medical insurance," Tebow said. "I guess one's workplace plays a big role in a foreign employee's ability to utilize China's social security."
However, Tebow is glad to know that if a foreigner ever decides to leave the country they can get a refund and get some of their money back.
The Chinese government also provides expatriate employees who are nationals of countries that have entered into bilateral or multilateral social security agreements with China exemptions on certain social security items.
Starting in October, five new countries have entered into such agreement with China. Previously, only Germany and South Korea had such agreements.
Now the list has expanded to Denmark, Canada, Finland, Switzerland, and the Netherlands, according to a report by China Briefing in October.
In turn, Chinese employees sent to participating countries will also be exempt from making the relevant social insurance contributions there.
According to the report, China has also signed agreements with France and Spain but those agreements are not in effect yet.
The report also introduced the process to apply for exemptions.
According to the report, companies with foreign employees are required to apply to related bureaus for exemption. The entity that employs the foreign employee in China must submit original certification of insurance issued by a relevant entity in the country of origin to the local Chinese social insurance bureau. This will then be verified and a copy will be held on record. Following verification of this documentation, and possible further verification and certification, the employee in question will be exempt from the relevant social insurance payments, the report wrote.