Auf dem weg zu einem neuen sozialrecht und reform des systems der sozialen sicherheit erfahrungen von deutschland und deren anpassung an vietnam

Dissertation

„Auf dem Weg zu einem neuen Sozialrecht und die Reform des Systems
der sozialen Sicherheit: Erfahrungen in Deutschland und deren
Anpassung für Vietnam“
Zur Erlangungen des Akademischen Grades Dr. iur.

Eingereicht am: 20.07.2008
Bei der Juristischen Fakultät der Universität Potsdam
Von: Le Thi Thuy Huong
Geboren am: 25.05.1972 in Hanoi – Vietnam

Präsidentin der Universität Potsdam:
Prof. Dr. Sabine Kunst
Dekan der Juristischen Fakultät der Universität Potsdam:
Prof. Dr. Stefan Saar

Gutachter:
1. Prof. Dr. Dieter C. Umbach
2. Prof. Dr. Markus Krajewski
Tag der mündlichen Prüfung: 17.11.2008

0


Vorwort
Die Arbeit lag der Juristischen Fakultät der Universität Potsdam im Sommersemester 2008
als Dissertation vor. Sie wurde Anfang Juni 2008 abgeschlossen und hat neuere
Gesetzgebung und Literatur, die bis zum Mai 2008 erschienen ist, berücksichtigt.
Diese Arbeit ist auf Englisch geschrieben worden, was sicherlich an deutschen Fakultäten
(noch) eine Ausnahme ist und zweierlei voraussetzt: Erstens, dass die Literatur auch in

Englisch verfügbar ist, und, Zweitens, dass der Betreuer in der Fremdsprache zu Hause ist.
Beide Voraussetzungen waren uneingeschränkt gegeben. Für mich als Autorin war es ein
großer Vorteil, dass ich nicht –wie dies traditionell früher war –längere Zeit auf die
perfektere Beherrschung der deutschen Sprache verwenden musste, sondern mich gleich
auf die Arbeit konzentrieren konnte. Selbstverständlich sind die deutsche Literatur und die
europäischen Diskussionen gleichwohl mit berücksichtigt worden. Natürlich ist die
Thematik nicht um ihrer selbst willen behandelt worden, sondern sie soll –wie schon die
früheren Arbeiten meiner Kommilitonen und Kommilitoninnen am „alten Lehrstuhl“ dazu beitragen, mögliche Strukturen und Institutionen, Theorien und Praxis für Vietnam
dazustellen und zu überdenken. Dass die Arbeit auf Englisch vorliegt, macht sie zudem
einem größeren Leserkreis in meinem Heimatland zugänglich.
Idee, Entschluss, Disziplin und die Arbeit des Denkens und Schreibens sind die
notwendigen Voraussetzungen zum Gelingen einer Dissertation, die der Autor, hier die
Autorin selbst erbringen muss. Doch das Vorhaben wäre nicht gelungen, wenn die
Verfasserin nicht vielfältige Unterstützung erhalten hätte.
Besonderer Dank steht meinem Doktorvater, Herrn Professor Dr. Dieter C. Umbach, der
diese Arbeit mit großer Verantwortung, Freundlichkeit und Geduld betreut und mir bei der
Fertigstellung geholfen hat, zu. Mit Interesse, Kompetenz und Wohlwollen beschäftigt er
sich seit acht Jahren intensiv mit der Reform der vietnamesischen Rechtssysteme und der
Situation des Rechtsstaats in Südostasien. Dadurch versteht er deutlich die vietnamesische
Praxis. Er hat mir diese Thema vorgeschlagen und bei der Betreuung mich mehrfach nahe
an der vietnamesischen Praxis beraten. Seine Betreuung der Dissertation war fordernd und

1


fördernd zu gleich; für beides bin ich ihm gleichermaßen dankbar, ebenso die Hilfe und
Diskussionen seines früheren Lehrstuhls und die oft gerühmten Doktoranden-Seminare.
Ohne die finanzielle Unterstützung vom vietnamesischen Ministerium der Erziehung und
Bildung (MOET), des Deutschen Akademischen Austausch Dienstes (DAAD) und der
zuständigen hilfreichen Stellen der Universität Potsdam- die mit Hilfsbereitschaft und

Kreativität die Finanzierung unterstützen - wäre meine Promotion in Deutschland nicht
zustande gekommen. Dafür bin ich ihnen sehr dankbar.
Mein Dank gilt auch meinen Kollegen und Kolleginnen in meiner Juristischen Universität
der Ho Chi Minh Stadt, dem früheren Saigon, und meinen Freunde in Deutschland für ihre
Unterstützung.
Sehr dankbar bin ich meiner ganzen Familie, besonders meinen geliebten Eltern, meine
Geschwister und meinem Ehemann. Ohne sein Verständnis und seine Unterstützung hätte
diese Dissertation nicht angefertigt werden können. Allen ihnen schulde ich Dank. Diese
Arbeit ist deshalb ihnen gewidmet.
Potsdam, im Juli 2008
Le, Thi Thuy Huong

2


CONTENTS

CONTENTS...........................................................................................................................i
LIST OF ABREVIATIONS ...............................................................................................iv
INTRODUCTION................................................................................................................1
I. Needs of the research ...............................................................................................1
II.
Objectives, study methods and structure of the research ................................3
Chapter 1: Theoretical backgrounds of Vietnamese social security law ........................6
I. Concept of social security ........................................................................................6
1. Definitions of social security................................................................................6
1.1
In narrow meaning.......................................................................................6
1.2
In broad meaning .......................................................................................13

2. Concept of social security in Vietnam’s perspective .......................................17
3. Roles of social security .......................................................................................22
4. Basic principles of social security .....................................................................23
4.1
Principle of solidarity.................................................................................24
4.2
The principle of equality............................................................................26
4.3
The principle of participation of those protected....................................26
II.
Social security system ........................................................................................27
1. The coverage .......................................................................................................27
2. Benefits ................................................................................................................29
3. Finance ................................................................................................................33
4. Administration....................................................................................................37
III.
Tendency of reforming social security system.................................................38
1. Requirements of reforming social security system .........................................38
2. Potential measures .............................................................................................39
2.1
Re-defining the scope of social security....................................................39
2.2
Financial reforms in reinforcing social security schemes.......................41
2.3
Privatized structure of social security scheme.........................................42
2.4
Cutting benefits and increasing contributions ........................................44
2.5
Other measures...........................................................................................44
IV.

Vietnamese social security law ..........................................................................47
1. The recognition of social security right in Vietnamese Constitution 1992 ...47
1.1
The recognition of social security in international law...........................47
1.2
The recognition of social security right in the Vietnamese Constitution
of 1992 .....................................................................................................................50
2. Social security law in Vietnamese legal system ...............................................52
3. Main branches of Vietnamese social security law ...........................................53
3.1
Social insurance ..........................................................................................53
3.2
Social assistance..........................................................................................56
3.3
Social privilege............................................................................................57
4. Relations between social security law and other laws in Vietnamese legal
system ..........................................................................................................................57
4.1
Administration law.....................................................................................57
4.2
Labor Law...................................................................................................58
Short conclusion .................................................................................................................59
Chapter 2: Overview of social security system of Vietnam............................................61
I. Development of Vietnamese social security system.............................................61

i


1. History of Vietnamese social security system ..................................................61
2. Current social security system ..........................................................................63

II.
Social insurance (Bao hiem xa hoi) ...................................................................64
1. The development of social insurance legislation before the adoption of Social
Insurance Law (“SIL”) 2006 .....................................................................................64
1.1
Interim Regulation on Social Insurance 1961 (“IRSI 1961”).................64
1.2
Interim Regulation on Social Insurance 1993 (“IRSI 1993”).................66
1.3
Regulation on Social Insurance 1995 (“RSI 1995”) ................................68
1.4
The adoption of SIL 2006 ..........................................................................69
2. Social insurance schemes ...................................................................................72
2.1
The coverage ...............................................................................................72
2.1.1
Compulsory social insurance ............................................................72
2.1.2
Voluntary social insurance ................................................................74
2.2
Benefits ........................................................................................................78
2.2.1
Main benefits ......................................................................................78
2.2.2
Some issues about unemployment benefit........................................81
2.3
Social insurance funds ...............................................................................85
III.
Health insurance (Bao hiem y te) ......................................................................90
1. Legislation ...........................................................................................................90

2. Benefits and administration ..............................................................................93
IV.
Social assistance (Cuu tro xa hoi) ......................................................................97
1. Legislation ...........................................................................................................97
2. Benefits and administration ..............................................................................99
V. Social privilege (Uu dai xa hoi) ...........................................................................100
1. Legislation .........................................................................................................100
2. Benefits and administration ............................................................................101
Short conclusion ...............................................................................................................102
Chapter 3: An overview of German social law..............................................................105
I. Concept of German social security law ..............................................................105
1. Definitions .........................................................................................................105
1.1
Social insurance law .................................................................................105
1.2
Social law...................................................................................................106
2. Principle of social state in German Basic Law (Grundgesetz – GG)............107
3. The classifications of German social law .......................................................112
II.
The development of German social security law...........................................115
1. The development of social insurance law.......................................................115
2. The codification of German Social Code (SGB)............................................122
3. The structure of SGB .......................................................................................126
3.1
General part (SGB I and SGB X) ...........................................................127
3.2
Specific part (SGB II – IX, XI and XII) .................................................130
III.
German social security system ........................................................................132
1. Social insurance (Sozialversicherung).............................................................132

1.1
Health insurance.......................................................................................134
1.2
Accident insurance ...................................................................................139
1.3
Pension insurance.....................................................................................140
1.3.1
Statutory pension insurance............................................................141
1.3.2
The supplementary occupational pension schemes.......................144
1.3.3
The additional voluntary personal old-age provisions .................145
1.3.4
Pensions reforms in Germany.........................................................146
1.4
Unemployment insurance ........................................................................151

ii


1.5
Long-term care insurance .......................................................................158
1.6
Special social insurance schemes for farmers........................................160
2. Social compensation (Soziale Entschädigung) ...............................................163
3. Social assistance (Sozialhilfe) ..........................................................................165
3.1
Basic principles of social assistance ........................................................166
3.1.1
Nachrangigkeitsprinzip .....................................................................166

3.1.2
Principle of individualization (Individualisierungsprinzip) ............166
3.1.3
Principle of supply of needs (Bedarfsdeckungsprinzip....................166
3.2
Social assistance benefit ...........................................................................166
3.3
Social support (Soziale Förderung).........................................................167
Short conclusion ...............................................................................................................169
Chapter 4: An analysis about the adaptation of German social security law to
Vietnam and suggests of reforming Vietnamese social security system......................172
I. The necessity of reforming Vietnamese social security law .............................172
1. Socio-economic requirements .........................................................................172
2. Legal requirements ..........................................................................................174
II.
The adaptation of German social security law to reforming social security
law of Vietnam..............................................................................................................180
1. Points of view of the adaptation ......................................................................180
2. The adaptation of experiences of Germany to reforming Vietnamese social
security law ...............................................................................................................182
2.1
The codification of new Social Security Code........................................182
2.1.1
Drafting general part of Social Security Code ..............................183
2.1.2
The adoption of law of each social security branch ......................186
(1)
The adoption of Health Insurance Law .........................................187
(2)
The adoption of Social Assistance Law ..........................................188

(3)
The adoption of Social Privilege Law.............................................189
2.2
Reforming SIL 2006 .................................................................................190
2.2.1
Voluntary social insurance scheme for farmers ............................190
2.2.2
Unemployment insurance benefits..................................................192
2.3
Partly privatization of social pension and health insurance schemes .194
2.3.1
Introducing various financing pension benefits mechanism ........194
2.3.2
The privatization of health insurance ............................................199
CONCLUSION.................................................................................................................201
1. The codification of new social security code ......................................................201
2. Reforming SIL 2006 .............................................................................................202
3. Resolving financial problems ..............................................................................202
REFERENCES .................................................................................................................204

iii


LIST OF ABREVIATIONS
AFG

German Employment Assistance Code
(Arbeitsförderungsgesetz)

AFTA

ASEAN Free Trade Area

APEC

Asia Pacific Economic Cooperation

ARSI

Vietnamese Amendment Regulation on Social Insurance

Art.

Article

ASEAN

Association of Southeast Asean Nations

ASEG

German Supplementary Law on Social Security in
Agriculture

ASLC

Vietnamese Amended and Supplementary Labor Code

ASRG

German Agricultural Social Security Reform Act

ASSAS

Vietnamese Amended and Supplementary Social Assistance
Schemes

AsylbLG

German Law on Benefits for Refugees
(Asylbewerberleitstungsgesetz)

AVAVG

Law on Employment Agency and unemployment insurance
(Gesetz über Arbeitsvermittlung und
Arbeitslosenversicherung)

AVG

German Social insurance Law for white-collar workers
(Angestelltenversicherungesgesetz)

BAföG

Federal Law on Training Allowances
(Bundesausbildungsförderungsgesetz)

BErzGG

Federal Law on Education (Bundeserziehungsgeldgesetz)

BGB

German Civil Code (Bürgersgesetzbuch)

BGG

Equal Opportunities for Disabled People Act
(Behindertengleichstellungsgesetz)

BKGG

Federal Law on Children Allowance
(Bundeskindergeldgesetz)

BSHG

Federal Law on Social Assistance (Bundessozialhilfegesetz)

BSS

Basic social security

BVerfG

Federal Constitutional Court (Bundesverfassungsgericht)

BVG

Federal Care Law (Bundesversorgungsgesetz)
iv


CESRC

Covenant on Economic, Social and Cultural Rights

ch.

Chapter

CHI

Compulsory health insurance

cl.

clause

Convention No.102

ILO Social Security (Minimum Standards) Convention

CP

Vietnamese Government (Chính phủ)

CPV

Communist Party of Vietnam

CSI

Compulsory social insurance

CSS

Social security for meeting contingencies

DP

Discussion paper

e.g.

for example (exempli gratia)

ed.

Editor

edn.

Edition

GDR

German Democratic Republic

GG

German Basic Law (Grundgesetz)

GRG

German Law on Health Reform (Gesundheitsreformgesetz)

GSiG

German Law on Basic Security (Grundsicherungsgesetz)

HCFP

The health care funds for the poor

HĐBT

Committee of Ministers (Hội đồng Bộ trưởng)

HEPR

Hunger eradication and poverty reduction program (Chương
trình xóa đói giảm nghèo)

HIA

Health Insurance Agency

i.e.

that is to say (id est)

id.

The same (idem quod)

ILC

International Labor Conference

ILO

International Labor Organization

ILS

International Labor Standards

IRSI

Vietnamese Interim Regulation on Social Insurance

KVG

German Law on Health Insurance of workers (Gesetz
betreffend die Krankenversicherung der Arbeiter)

LC

Labor Code of Vietnam

MOET

Ministry of Education and Training of Vietnam

MOH

Ministry of Health of Vietnam

MoLISA

Ministry of Labor, Invalids and Social Affairs of Vietnam
v


MPISoc

Max Planck Institute for Foreign and International Social
Law

NĐ-CP

Decree of Government (Nghị định Chính phủ)

No.

Number

p.

page

para.

Paragraph

PAYG

pay-as-you-go

PHI

German Private Health Insurance

PL-UBTVQH

Ordinance of Standing Committee of National Assembly
(Pháp lệnh Ủy ban Thường vụ Quốc hội)

QĐ-TTg

Decision of Prime Minister (Quyết định Thủ tướng Chính
phủ)

Recommendation No.67

ILO Income security Recommendation 1944 (No.67)

RHI

Vietnamese Regulation on Health Insurance

RSI

Vietnamese Regulation of Social Insurance

RVO

German National Insurance Code
(Reichsversicherungsordnung)

SAS

Vietnamese Social Assistance Schemes

Sec.

Section

SGB

German Social Code (Sozialgesetzbuch)

SHI

Statutory Health Insurance

SIA

Social Insurance Agency

SIL

Vietnamese Social Insurance Law

SL

Order (Sắc lệnh)

SOEs

State-owned Enterprises

SPD

Social Party of Democracy

StGB

German Criminal Law (Strafgesetzbuch)

UDHR

Universal Declaration of Human Rights

UNDP

United Nations Development Program

UVEG

German Unified Law on of Accident Insurance
(Unfallversicherungs-Einordnungsgesetz)

VHI

Voluntary health insurance

vol.

volume

VSHI

Vietnam’s social health insurance
vi


VSI

Voluntary social insurance

WoGG

German Law on Residence (Wohngeldgesetz)

WP

Working paper

WTO

World Trade Organization

vii


INTRODUCTION
I.

Needs of the research

The need for security against risks in life and against certain positive contingencies
constitutes the basis of every social security system in almost countries around the world.1
In social policies of nations, social security thus plays gradually a more essential role in
creating the stability and security in the life of population, and then promotes the economic
growth and social development. In legal aspect, social security right has been largely
recognized by international law as one of basic human rights;2 consequently, it is regulated
as one fundamental right of citizens in the national constitution of nations. Vietnam is not
an exception.
Since 1986, Vietnam has shifted from planned economy to market-oriented economy. The
Renovation and open-door policy has brought about changes in different aspects of the
socio-economic life. The development of the economy has created favorable conditions for
Vietnam to better resolve social problems, including social security.3 Along with the
achievements of the economy, the living standard of Vietnamese population has been
much improved. However, disadvantages of the market economy have also exposed the
people to more risks and contingencies. This situation has led to a growing need for social
security.
Moreover, Vietnam has recently accessed to regional and international economic

organizations such as Asia Pacific Economic Cooperation (APEC) and World Trade
Organization (WTO). Though in principle, labor and social security issues are not directly
linked to trade under these organizations, Vietnamese working people are borne the
pressures of competition in labor market with the reduction of primary role of formal
sector; as a result, the rate of unemployment may increase. Also, more favorable
environment for trade and investment and greater flow of goods and services may cause
social problems in population groups, economic regions and sectors, especially among the

Pieters, Danny (ed.), Social protection of the next generation in Europe, Kluwer Law International, 1998,
p.307.
2 Arts. 22 and Art. 25 Cl.1 of Universal Declaration of Human Rights of 1948 and Art. 9 of the International
Covenant on Economic, Social and Cultural Rights of 1966.
3 Nguyen, Hien Phuong, Market economy and requirement of perfecting social security law, Law Magazine
No.4, 2006, p.40.
1

1


disadvantaged. In addition, the requirement of legal harmonization is also posed a question
for Vietnam in integration process to these “playing-fields”.
In 2006, Social Insurance Law (SIL) was enacted to satisfy the above requirements. The
adoption of this law is in fact a great achievement of Vietnamese legislation. SIL 2006
provides a number of new regulations such as voluntary social insurance schemes applying
working people in informal economic sectors and unemployment insurance benefit, etc.
However, though the adoption of SIL 2006, the current social security system of Vietnam
has been existed numerous disadvantages. Firstly, Vietnam has still lacked a unified act, in
which provides all schemes of the social security system. SIL 2006 only provides social
insurance schemes to working people; health insurance scheme yet has not been regulated
in SIL 2006. In addition, except social insurance scheme is provided in SIL 20906, other

pillars of Vietnamese social security system such as social assistance and social privilege
have been still regulated in sub-law documents with the low legal effects. Secondly, the
structure of social insurance system in SIL 2006 has been unreasonable, especially
provisions on unemployment benefit in some extent has still contradicted with existing
redundancy and severance benefits provided by employers. Furthermore, SIL 2006 has not
provided a real effective social insurance scheme for farmers. Thirdly, financial problems
in social security system in general and social insurance schemes in particular are big
challenges for Vietnam. There are many difficulties in maintaining and growing long-term
social security funds such as pension and health insurance funds. Besides, the situation of
evasion of social insurance contributions is problematic in Vietnam. Finally, the social
safety net has been not really established. Meantime, for a country in transition and
economic reforms, social safety nets system which aims at short-term and emergency
measures is crucially important to support the disadvantaged people in difficult or force
majeure situations.4
In order to surmount these disadvantages, the need to reforming social security law is
inevitable. At first, Vietnam needs to adopt a new unified and comprehensive social
security code in order to govern all social security schemes. Then disadvantages of SIL

Labor and social issues emerging from Vietnam’s accession to the WTO, Report of Ministry of Labor,
Invalids and Social Affairs of Vietnam (MoLISA).

4

2


2006 and the finance of social security system should be made good in order to reinforce
the effect of the system.
Although such importance of the research, it is noted that there has not been any research
which is systematically implemented about this issue in Vietnam so far. Vietnam

legislators have not much experienced in dealing with the issues, especially in drafting a
new social security act. Therefore, the possibility to learn from other lands is especially
important for Vietnam. In addition to that, the process of learning includes beneath the
choice and evaluation of the changed circumstances which may be very helpful for the
fulfilment of the reforms in the country.
II.

Objectives, study methods and structure of the research

To find out the measures for improving effectiveness of Vietnamese social security law,
Germany has been taken into account as a case study of the research. The first reason of
this choice is that Germany is considered as the “motherland” of social security with more
than 100 years of development. It means that German social security system is wellstructured and it can become a model for the consideration. Moreover, reforms on social
security system which Germany has initiated over years can bring some lessons to
Vietnam, especially measures of resolving financial problems of the social security system
built basing on the principle “pay-as-you-go” (PAYG). In addition, Germany had
experienced in successfully codifying the Social Code (Sozialgesetzbuch - SGB) since the
1970s. The aim of this codification, according to German legislators, was to simplify, to
unify and to clarify social security law, which was haphazardly regulated by numerous
separate acts. It was hoped that all social security laws could be shaped

into one

comprehensive system of law in order to promote the citizen’s understanding of the law
and thereby their trust in the constitutional welfare state, as well as to simplify the
application of the law and to guarantee legal certainty.5 Accordingly, Vietnam is favorable
to learn this model in order to adapt to the legislation process of adopting social security
code of Vietnam.
For the purpose of the research, analysis and evaluation would be two main study methods.
Besides, the comparison method is sometimes used. Through these methods, both

Pieters, Danny (ed.), Social security law in the fifteen members states of the European Union, Antwerpen –
Apeldoorn, Maklu, 1997, p.112.
5

3


Vietnamese and German social security system shall be comprehensively examined in
theory as well as in practice, so that the necessary assessments for the potential adaptation
of German social security law to Vietnam will be shown.
The research is divided into four chapters. The first chapter analyzes theoretical
backgrounds of social security. In this part various definitions of social security are
introduced along with issues concerning social security such as basic principles,
components of a general social security system and so on. The chapter specifically explains
how both the terms “social security” and “social insurance” are applied or exist in
Vietnam. Accordingly, the writer will clarify the concept of social security in the context
of Vietnam. Moreover, position of social security law in Vietnamese legal system and
relations between it and some other fields of law are also touched upon.
The second chapter analyzes the existing social security system of Vietnam as a whole.
First is a sketch of history of Vietnamese social security. Then the development of
legislation of each scheme of the system is pointed out. The main features of each scheme
are also analyzed in depth. From this analysis, the disadvantages of each scheme are
extracted. The conclusion of this chapter will set out a list of required, necessary reforms
which should be incorporated into the Vietnamese social security system.
In the third chapter, the German overall social security system is stressed. Firstly, the
research introduces theoretical issues of German social security law. Then the development
of German social security law is sketched out with the emphasis on Bismarckian social
insurance system. Especially, the codification process of SGB is considered and evaluated.
Then an overview about social security system in Germany with main branches such as
social insurance which includes health insurance, accident insurance, pension insurance,

unemployment insurance and long-term care insurance, social compensation and social
assistance will be presented.
The fourth chapter discusses capacities of adaptation of German social security law to
reforming the Vietnamese current social security law. The socio-economic conditions as
well as legal requirements of Vietnam are at first drawn. Each problem of Vietnamese
social security system is then discussed in considering with equivalent/similar provisions
of German social security law. Experiences of German reforms on social security system
4


are also taken into account and the adaptation of these experiences to Vietnam is
examined.
The research concludes by presenting potential suggests to reforming Vietnamese social
security law. The research is aimed at the fact that the capacity of adaptation of German
social security law to Vietnam is in some extent acceptable.

5


Chapter 1: Theoretical backgrounds of Vietnamese social security law
I.

Concept of social security

1. Definitions of social security
1.1 In narrow meaning
The term “social security” was first officially used in the United States Federal Social
Security Act passed by Congress in 1935, in which it meant popularly the federal system of
old-age, survivors’, and disability insurance.6 This term appeared again in an act passed in
New Zealand in 1938 which brought together a number of existing and new social security

benefits.7 It was one again used in 1941 in “Atlantic Charter”, a wartime document.8
After the term “social security” was appeared in the above documents, it has become more
familiar with countries around the world through the recognition of this term in a number
of important instruments of International Labor Organization (ILO). The adoption of this
term in ILO’s legal instruments was impressed by the value of social security as a simple
and arresting expression of one of the deepest and most widespread aspirations of people
all around the world.9
According to ILO, social security is understood as “the protection which society provides
for its members, through a series of public measures, against the economic and social
distress that otherwise will be cased by the stoppage or substantial reduction of earnings
resulting from sickness, maternity, employment injury, unemployment, invalidity, old age
and death; the provision of medical care; and the provision of subsidies for families with
children”.10 From this definition, the term “social security” was officially used in
documents of ILO as public measures in order to protect people from concrete
contingencies in their life.

Introduction to social security, International Labor Office, Geneva, 1984, p.3.
The Social Security Act 1938 of New Zealand introduced a new concept - namely, that every citizen had a
right to a reasonable standard of living and that it was a community responsibility to ensure that its members
were safeguarded against the economic ills from which they could not protect themselves.
8 The “Atlantic Charter” was signed on 14 August, 1941 between Great Britain and the United States. As the
fifth item in this Charter was provided: “…to bring about the fullest collaboration between all nations in the
economic field with the object of securing, for all, improved labor standards, economic advancement and
social security”.
9 Supra note 6, p.3.
10 ILO Convention 102 of 1952; See also Introduction to social security, International Labor Office, Geneva,
1984, p.3.
6
7

6


Then, the ILO Social Security (Minimum Standards) Convention (No. 102) ("Convention
102") adopted is the landmark source in international social security legislation.11 In the
absence of previous standards of social security, the temptation is to turn instead to
Convention No. 102, which sets out nine fundamental benefits, namely medical care,
sickness benefit, unemployment benefit, old-age benefit, employment injury benefit,
family benefit, maternity benefit, invalidity benefit and survivors’ benefit, that should form
the substance of social security, and most importantly establishes institutional thresholds to
be met for their implementation.12
The benefits included in Convention No.102 are a representative range of the
contingencies that posed the biggest threat to the economic security of most workers and
households in industrial society after World War II. De facto communities were thus
formed to institutionalize solidarity in the face of common adversities, and to gradually
expand to include other risks and other groups, thus opening up the prospect of universal
social security.13
However, Convention No. 102 was not drawn up to serve as a yardstick for the universal
application of this right, and the relatively small number of the states that have ratified it
should be enough to deter people from using it in this way.14 If we look at them closely, we
can see that despite their apparent flexibility, they are still geared toward a system focused
on industrial workers, which marginalizes most of the population in poor countries.
Moreover, even if the benefits Convention No. 102 provides for are certainly still relevant
today, the social needs for which they cater have altered a great deal over the last fifty
years, bringing subsequent changes, including changes to prescribed rules. This is a
limitation of Convention No. 102.15

Blanpain R. et al, International Encyclopedia of Laws: Social security Law, vol.1 ILO 12.
Vandenhole, Wouter, Article 26: The right to benefit from social security, Martinus Nijhoff Publishers,
Leiden: Boston, 2007, p.7.

13 Meknassi, R. Filali, Social protection and decent work: new prospects for international labor standards:
actors: extending social security in the developing countries: between universal entitlement and the
selectiveness of international standards, Comparative Labor Law & Policy Journal, 27 Comp. Lab. L. &
Pol'y J. 207, p.210.
14 Introduction to social security, International Labour Office, Geneva, 1984.
15 Meknassi, R. Filali, Social protection and decent work: new prospects for international labor standards:
actors: extending social security in the developing countries: between universal entitlement and the
selectiveness of international standards, Comparative Labor Law & Policy Journal, 27 Comp. Lab. L. &
Pol'y J. 207, p.211.
11
12

7


Nevertheless, as well as laying down criteria in order to establish a minimum standard,
Convention No.102 has the advantage in that it sets out a range of fundamental benefits
and specifies the groups that should form the focus of national social security policies. In
general, the purpose of the social security has been described as the protection of persons
against certain “social risks” which firstly are provided in Convention No. 102. But the
number of risks has increased in recent years so that they can now generally be described
as events which may cause loss of income or increase in the demands made upon income.16
Viewed against the background of the changes in its fundamental values and in the actual
needs of States which are given a completely free hand to implement it, it becomes a
linchpin for the “third generation” of social security standards. These standards, together
with all the conventions and recommendations drawn up by the ILO to date, constitute “a
normative framework held together by a unique set of common aims and principles
underpinning the social security system”.17
So right in its first appearance, social security was understood as collective remedies
against adversity and deficiency.18 The definition of social security has a lot to do with the

definition of integrated social development, and its extension is largely an institutional and
administrative question. If social security in the strictest sense is a series of mechanisms
that protect people from need by providing them with care and replacement income if they
require it, the clear assumption is that people's basic needs will usually be satisfied through
earned income and other public services.19 With the introduction of Social Security Act
1935 of the United States and especially the recognition of ILO in Convention No. 102, the
term “social security” has been become familiar with many countries around the world
only for short time later, although the scope of this term varies from a country to another.
Up to now, 42 states had ratified Convention No.102.20 Although Convention No.102
covers nine social risks, each State Party is to comply with at least three of the benefits
covered, in which at least one of the following five hard core branches is to be included:
unemployment insurance, old-age insurance, employment injury insurance, invalidity
insurance or survivor’s insurance.21
Euzeby, Chantal, Social security for the 21st Century, International Social Security Review vo.51, 2/1998.
Meknassi, R. Filali, Social protection and decent work: new prospects for international labor standards:
actors: extending social security in the developing countries: between universal entitlement and the
selectiveness of international standards, Comparative Labor Law & Policy Journal, 27 Comp. Lab. L. &
Pol'y J. 207, pp.207-208.
18 Introduction to social security, International Labour Office, Geneva, 1984, p.3
19 Gropman, Larry M., Social Security, Detroit College of Law Review, 1994 Det. C.L. Rev. 871, 1994.
20 Statistic of ILO updated on 01 December 2006.
16
17

8


But the definition of ILO was still criticized by some scholars. According to them, it is not
really a concept of social security, rather a description regarding the content of intended
schemes.22 In an effort to replace this above definition of social security, some of these

scholars tried to seek other concepts in more general meaning. In one literature, social
security is defined as “benefits that society provides to individuals and households –
through public and collective measures – to guarantee them a minimum standard of living
and to protect them against low or declining living standards arising out of a number of
basic risks and needs”.23 This concept showed three elements which must be taken into
account. Firstly, the definition establishes that people derive individual rights and
entitlements from social security; secondly, it defines the social element of social security,
that is provided within the context of public and collective – an often voluntary- not-forprofit arrangements; thirdly, it makes clear that social security aims at protection, and that
its role should not be confused with policies for the promotion of employment and the
economy. In general, this definition makes the point that social security is concerned not
only with a limited range of contingencies, but also with reducing the impact on household
budgets of expenditure on basic needs such as medical care, education, housing and food.
This is a concept of social security in a broader meaning.24
Furthermore, the concept of social security currently is expressed through various models
and mechanisms, including social insurance programs, as well as universal systems of
social protection. In another literature, the term “social security” is defined in two
meanings: first, it can be used to denote an objective of government policy; and the second,
it is used to describe a set of policy.25 Currently, references to social security in some
countries are to the latter. It reflects the lack of emphasis placed in government policy in
recent years on the important social objective which the social security system aims to
achieve.26

Art. 2 of Convention No.102. See also Vandenhole, Wouter, Article 26: The right to benefit from social
security, Martinus Nijhoff Publishers, Leiden: Boston, 2007, p.6.
22 Social security law: general principles, Butterworths, 1999.
23 Van Gineken, Wouter, Extending social security: Policies for developing countries, International Labour
Review, vol. 142, No.3, 2003.
24 Harris, Neville, Social security law in context, Oxford, 2000, p.4.
25 See Mayers v. Adjudication Officer C-116/94 (1996) 1 CMLR 461 and Jackson and Cresswell v. Chief
Adjudication Officer (1993) 3 All ER 265.

26 Harris, Neville, Social security law in context, Oxford 2000, pp.7-8. See also A.B.Atkinson, Poverty and
social security, Hemel Hempstead: Harverster Wheatsheaf, 1989, p.99.
21

9


Some European countries understand social security as consisting of family benefits, social
insurance benefits and right to compensation of the cost of health services by the social
insurances. Characteristically, social security is funded with social insurance contributions,
which are aimed to provide cover against the nine “traditional” contingencies, and social
benefit claims are treated according to objective criteria, which are based on legislation.
The conceptual counterpart is social assistance, which is understood as tax-funded, needbased benefits. Any in-between benefits (“mixed benefits”) and services do not fit in this
conceptual framework.27
Especially, in Germany, the term social security was historically originated from theory of
Bismarck about social insurance.28 From 1881, the modern social insurance which is also
called as social security later had been instigated by the Prussian Emperor’s program, in
which Otto von Bismarck’s Government sought internal cohesion and external strength for
the State. At that time, only social insurance system with four typical contingencies was
introduced, namely sickness (1883), work injury (1884), incapacity for work (1889) and
old age (1891).29 In the beginning, social insurance consisted of a number of schemes
designed to protect workers against risks. Protection, in general, was only given to those
who had paid insurance contribution during their working lives: social insurance was
therefore an extension into the social welfare field of the concepts and methods of
insurance which prevailed in the commercial world.30
The Bismarckian model, started in Germany in the 1880s, was based on compulsory
“social insurance” against a range of ‘contingencies’ that interrupt or end earnings originally industrial accidents, old age and sickness, and the associated costs of medical
treatment. Contributions and benefits were related to earnings, as well as to occupations.
Administration was decentralised. Contributions were made jointly by employers and
employees to jointly administered ‘social funds’ that paid out benefits. Social assistance

was not integral to the scheme, and those not in a position to make contributions had no
claim on the social funds. Rather, they were supported by families, charities and local
27 Van Langendonck, Jef (ed.), The right to social security, Social Europe Series, vol. 12, Intersentia,
Antwerpen – Oxford, 2007, p.230.
28 Eichenhofer, Eberhard, The social insurance in Germany: The Bismarck model and its challenge in the 21st
century, in “Reform and Perspective on social insurance – lessons from the East and the West” (Ming-Cheng
Kuo, Hans F. Zacher and Hou-Sheng Chang (eds.)), The Hague, Kluwer Law Internat., 2002, p.19.
29 Ashley, Annie, The social policy of Bismarck, Longmans, Green and Co., 1912.
30 Into the twenty-first century: the development of social security, International Labor Office, Geneva, 1984,
p.17.

10


arrangements. Since the occupational hierarchy is reproduced in the benefit system, the
Bismarckian system has been called “morally undemanding”.31
German social insurance model soon attracted other Central European countries to follow
suit in the following years, during which the number of acceptable social insurance
contingencies grew also.32 Then unemployment insurance scheme was widely accepted as
the fifth contingency in most countries before the World War One.33 Due to the millions
killed or permanently disabled in the war, disability and loss of the breadwinner were also
accepted in Germany as insurance contingencies.34
It can be thus remarked that the term social insurance has been officially used in Germany
much earlier than the term social security. The change in terminology from social
insurance to social security, however, had more than formal significance for it indicated
that social insurance benefits were no longer restricted to insured persons but were being
made gradually available, as a right, to those who were not members of the workforce.35
Following the Second World War, previously accepted contingencies saw the addition of
two new ones: maternity and family. The latter was especially influenced by William
Beveridge (1942), whose committee had the task of compiling a program of so-called

“social security for all” for social policy in post-war England, many parts of it devoted to
the abolition of poverty. The content, however, aimed much further, at the establishment of
the welfare state.”36 The Beveridgian model, set up in Britain in the 1940s, is best regarded
as a tax-based system of universal entitlement, although this understanding has been
clouded now that it exhibits a bewildering array of taxation, insurance and means-testing.
Benefits were not based on contribution, but on a calculation of physical need. They were
payable on a flat-rate basis to all that fell into the specified categories. Beveridge was keen
to avoid giving the impression of a “something-for-nothing” system, and erected two

Skidelsky, Robert, European Welfare Models in Crisis, Essay of Social Market Foundation, 1/1998.
Id.
33 Kvist, Jon, Complexities in assessing unemployment benefits and policies, International Social Security
Review, vol. 51, 4/98, 1998.
34 Into the twenty-first century: the development of social security, International Labor Office, Geneva, 1984,
p.18.
35 Watson, Philippa, Social security Law of the European Communities, Mansell Publishing, London 1980.
36 Van Langendonck, Jef (ed.), The right to social security, Social Europe Series, vol. 12, Intersentia,
Antwerpen – Oxford, 2007, p.228.
31
32

11


defences against this. As such, the system was more universalist, more vertically
redistributive, more egalitarian, more centralist, less generous and cheaper.37
Even Convention No.102 was in essence a compromise between the old “Bismarckian”
social insurance for workers and the new “Beveridgian” social security for all.38 With this
convention, the ILO incorporated its conventions into a larger instrument, extending to all
branches, and providing for a larger coverage, not only industrial workers but of other

citizens as well.39
Meantime, some other scholars define social security as “a system of assistance
guaranteed by the state, granted to people in need when their normal source of income has
been interrupted or ended (for example through sickness, unemployment or retirement). It
could entail assistance to certain disadvantaged groups (for instance the handicapped, the
families of deceased workers or people suffering from industrial injuries), or
supplementing the incomes of pensioners. It could also include social insurance schemes
but in a more strict sense of the word it refers to assistance schemes financed from
taxation”.40 In this sense, “social security” can be simply understood as benefits which
insured persons may receive in case of contingencies that prevent an insured person from
earning his or her living, or expose him or her to the emergencies that cause extraordinary
strain on limited incomes.
Furthermore, while explaining the concept of social security, some scholars also showed a
differentiation between social security and social justness in an effort to more clearly
define the term “social security”. If social security is the possibilities that every individual
in society can be assisted to satisfy basic needs in his life in a manner the human dignity,
social justness means that every people has equal opportunities to archive and keep
individual strength and capacities corresponding their social position in the State and
society.41 In this sense, the concept of social justness is much broader than concept of
social security.
Skidelsky, Robert, European Welfare Models in Crisis, Essay of Social Market Foundation, 1/1998.
In his report in 1942, Beveridge, a British economist and social reformer, formed a principle of
comprehensive insurance protection for all in Great Britain. See also Neville Harris (ed.), Social security law
in context, Oxford, 2000, p.87.
39 Van Langendonck, Jef (ed.), The right to social security, Social Europe Series, vol. 12, Intersentia,
Antwerpen – Oxford, 2007, p.7.
40 Social security: general principles, Butterworths, 1999.
41 Schmidt, Alpamann, Sozialrecht 1, 2nd edn., Alpmann und Schmidt Juritische Lehrgänge Verglasges.
37
38

12


In general, in the beginning of appearance, the concept of social security was narrowly
defined through listing the concrete schemes of social security system. And its coverage
also narrowed among workers. But along with the development of this system, the
traditional concept of social security should be extended in order to respond to the realities
faced by informal economy workers, who constitute the majority of the world labor force
and the all the population. But the problem is in case where the concept of social security is
expanded, these countries can meet many difficulties to assure the schemes.
1.2 In broad meaning
The main development of the concept of social security took place in the 20th century,
when social security has been largely recognized by international law as a socioeconomic
human right.42 Then it was taken into account by almost nations around the world. Toward
the end of the 20th century, many nations have extended the concept of social security to
cover a variety of contingencies, including sickness, unemployment, old age, employment
injuries, maternity, family allowances, invalidity, and death of a breadwinner. Social
security is a combination between components of public policies. It can be governed in
order to satisfy needs of workers and citizens in a context of globalization with changes of
economy, society and demography which have not existed before.43
Over years, this terminology has developed to have a broader and broader meaning.
Nowadays, “social security” is often used to point all government programs which
designed primarily to help individuals meet the loss of earnings, the absence of income, or
the increase in expenditure caused by the birth of children, sickness, accident, disability,
unemployment, old age, and death.44 As a result, there are many concepts of social security
which are defined as “the body of arrangement shaping the solidarity with people facing
(the threat of) a lack of earnings (that is, income from paid labor) or particular costs”.45

GmbH &Co.KG, Münster, 2005.

42 Ben- Israel, Ruth, Social Security in the year 2000: Potentiality and Problems, 16 Comparative Labor Law
Journal 139 (Comp. Lab. L.), 1995, pp. 140.
43 Towards New Found Confidence, International Social Security Association, – in “Some concepts and
structure of a modern social security system”, The Labor and Society Magazine, No. 284, Hanoi 2005, pp.4748.
44 Ball, Robert M., Social security today and tomorrow, Columbia University Press, New York 1978, p.2.
45 Id.

13


Besides, social security can also mean variable systems covering social risks, which all
have in common the fact that they provide certain basic benefits and that a significant
proportion of the population contribute to these systems.46
While referring to development of the term “social security” in narrow and broad meaning,
scholars and legislators also give various approaches to this concept. One of approaches is
to divide social security into “basic social security” (BSS) and “social security for meeting
contingencies” (CSS).47
On the one hand, BSS is directly linked to the problem of deficiency of those who are not
in a position to access minimum of resources to meet their economic and social
requirements for a dignified life in their society. This takes care of human deprivation and
vulnerability. In terms of BSS, it should be possible to identity the core constitutive
elements. Here scholars identity four realms of security that could constitute BSS. These
are: Food security, Health security, Housing security, and Education security. In this sense,
BSS is also understood as a concept of social security in a narrow meaning.48 In fact, those
who enjoy social security today for meeting contingencies are those who have been able to
take care of their basic social security.
On the other hand, many scholars see that this was also the priority in the history of the
evolution of social security policies and arrangements in Western countries where
currently CSS is the dominant one but arising out of a situation where basic human
deprivations have been taken care of to a large majority of population.49

Some scholars defined social security in the sense that social security was not longer “a
function of the state alone”, but “a partnership between the individual and the state – a

Meknassi, R. Filali, Social protection and decent work: new prospects for international labor standards:
actors: extending social security in the developing countries: between universal entitlement and the
selectiveness of international standards, Comparative Labor Law & Policy Journal, 27 Comp. Lab. L. &
Pol'y J. 207, p.210.
47 Kannan, K. P., Social security, poverty reduction and development: Arguments for enlarging the concept
and coverage of social security in a globalizing world, ESS Extension of social security, paper No.21,
International Labor Office, Geneva, 2004.
48 Id..
49 Kannan, K.P., Social security, poverty reduction and development: Arguments for enlarging the concept
and coverage of social security in a globalizing world, ESS Extension of social security, paper No.21,
International Labour Office, Geneva 2004, p.7.
46

14


system built on twin pillars”.50 This opinion became a stone to develop the ideas of
privatization of social security system.
In other instruments, the ILO also refers the concept of income security in connection with
main component of social security system. Income security schemes should relieve want
and prevent destitution by restoring, up to a reasonable level, income which is lost due to
the inability to work (including old age) or to obtain remunerative work, or by reason of
the death of the breadwinner. Income security should be organized as far as possible on the
basis of compulsory social insurance, and provision for needs not covered by compulsory
social insurance should be made by social assistance.51
It therefore can be said that social security indicated a broad view of the objective of state
support: from one which was conditional on insurance, and thereby restricted to insured

workers, to “a system of social protection for all in poverty and need”.52
In another aspect, social security is identified with “social safety nets”. Safety nets and
systems for income protection may also, up to a point, be conducive to economic
efficiency, since they may enhance political and social stability. But, in particular, we have
learned over the years that highly selective social policies can make a big difference in the
living conditions among the poorest sections of a society, also at a given level of per capita
Gross Domestic Products (GDP).53
Nowadays, in many researches, the social protection era has been referred.54 During this
phase, the concept of social security was further expanded to provide basic social support
for the whole population regardless of contribution or employment history, although both
of these factors remained important.55 This is in fact an ideal scheme. Under the social
protection approach, participation was no longer restricted to those in full formal
Green Paper of South Africa’s Social Security Law (1998), ch.11, para.7.
See Income security Recommendation 1944 (No.67) of ILO. The Recommendation No.67 mentions
invalidity and employment injury as contingencies to be covered by compulsory social insurance. It provides
that arrangements should be made to take account of loss of earnings due to disability as a condition for
entitlement to benefit (para. 11).
52 Watson, P., Social security law of the European Communities, Oxford: Mansell, 1980, p.1.
53 Beyond HEPR: A framework for integrated national system of social security in Vietnam, UNDP Policy
Dialogue Paper 2005/1, Hanoi 3/2005, p.13.
54 Id.
55 Generally Social Insurance and Social Protection, Report of the Director-General, International Labour
Conference, 80th Session (1993).
50
51

15