The Government of Viet Nam has expressed an intention to implement a child benefit for all children age 3 under its Master Plan for Social Assistance and Development. At the same time, the Government has embarked on an ambitious reform agenda that aims for “social insurance for all” within a multi-tiered social security system. However, to date, the Government has struggled to devise incentives that encourage voluntary participation among informally employed people. It also continues to grapple with a national social security system characterised by a distinct divide between social insurance on the one hand — which covers those who work in registered establishments and pay contributions — and on the other hand, social assistance for specifically and narrowly defined groups, resulting in low coverage overall.
In this report, commissioned by the International Labour Organization, Development Pathways’ Shea McClanahan and Bjorn Gelders examine the potential for a multi-tiered child benefit to help the Government meet these multiple objectives. Their analysis demonstrates how a multi-tiered child benefit could potentially act as an incentive for workers with children to join the VSS – offsetting the high cost of bringing up children and the costs of a social insurance contribution early in parents’ working lives – while at the same time ensuring children’s basic right to social protection through an adequate, tax-financed benefit that would guarantee that all families with children are better off. The report concludes that a multi-tiered child benefit would be affordable, but that key decisions about the benefit’s intended purpose and parameters will determine its feasibility and impacts.