Claiming Your Social Insurance Refund in China
What is China's Social Insurance Scheme & Do I Have An Account?
China has required that all employees (including foreign employees) participate in and contribute to government social insurance funds since 2011. There are several separate segments that make up an employee's social insurance fund including: pension, medical insurance, unemployment, work related injury and maternity. Whilst foreign employees contribute to all five of these segments, generally only the first 2 on the list above can be refunded by foreigners (note that there are some slight regional discrepancies for this). Social Insurance funds are managed regionally by local government branches of the Social Insurance Bureau so the system is not central for all of China. If you have worked in two different cities in China then you will have TWO entirely separate social insurance fund accounts that need to be refunded separately.
The amount of social insurance paid each month for pension and medical insurance (the parts that can be refunded) is as follows:
Pension 8% of Monthly Salary
Medical Insurance 2% of Monthly Salary
To give an example of how much someone typically has in their fund account - a foreign employee earning ¥25,000 per month contributes ¥30,000 per year to the pension and medical insurance segments of their social insurance fund. A foreign employee who has been working in China for three years in total should have ¥90,000 in their social insurance account that can be fully refunded. It's important to note that in some cases employers falsely declare an employee's salary level to the Social Insurance Bureau in order to lower the monthly contribution payments (and increase the employee's take home salary) and some employers do not register employees for social insurance at all (this is often seen in small scale kindergartens / training centers). It's also important to note that there are different rules / practices in different regions of China. In Shanghai, for example, employers can (an often do) legally opt out of registering employees for social insurance. In saying that, most employers in SHENZHEN and BEIJING do pay social insurance for foreign employees.
WHEN Can I Claim My Refund?
You do not need to be leaving China in order to refund your social insurance account.
China's social insurance rules state that a foreigner can refund their social insurance fund when "when leaving China". In practice, social insurance funds can be refunded at any time as the government bureau does not check whether or not a person is actually leaving China. Furthermore there appears to be no restriction for simply establishing a new social insurance account after an account has been refunded and closed (note there may be regional differences with this). Since the social insurance funds are regional instead of central, it is common for foreigners who are moving to another city in China to refund their account in the city they are moving from when leaving even though they are not leaving China.
How Do I Refund My Chinese Social Insurance Account?
The Social Insurance Bureau (社保局) is responsible for administrating employee social insurance funds including processing registrations and refunds. Due to social insurance being managed regionally in China, the process for refunding an account is completely different in different cities. Like most bureaucratic processes in China, everything must be done in Chinese language and dealing with the government bureau can be difficult.
If you would like assistance with processing your social insurance refund, please get in touch with us through our contact form below. Our fees for our social insurance refund service are reasonable and can be paid after your refund has been successfully made.
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