Pension
In Taiwan, several programs belong to the social security framework. Labor Insurance, the Labor Pension System, and the National Pension Insurance are part of the social security framework for employees, but they serve distinct purposes and target different groups.
Labor Insurance is a mandatory employment-based insurance program designed for formal sector employees, including private companies and public organizations, between the ages of 15 and 65.
Under the Labor Pension program, employees hired after 2005 have individual pension accounts. Employers are required to deposit monthly contributions in these accounts, and employees' contributions are voluntary up to 6% of their monthly salary. Employees may start receiving benefits at the age of 60, regardless of employment status.
Finally, the National Pension Insurance program offers coverage for employees between the ages of 25 and 65 who are ineligible for any other pension program. Employees must participate in this program. Employees covered by the Labor Insurance program are excluded from the National Pension Insurance program.
Depending on the type of program, employees, employers, and the government share contributions to social insurance.
Dependents/Survivors Benefits
The mandatory Labor Insurance program provides survivors benefits in the event of death of an insured person who was eligible to receive an old-age or disability pension or an individual who had at least 15 years of contributions. Spouses, children, parents, grandchildren, and siblings are eligible beneficiaries. The pension paid to the survivors is 1.55% of the deceased's average monthly insurance salary per year of insurance coverage. The minimum pension is TWD 3,000 (New Taiwan dollars) per month. Survivors would receive lump sum benefits if the deceased employee had contributed for less than 15 years.
Under Labor Occupational Accident Insurance, survivors receive a lump sum equal to 5 months of the insured person's average salary. If no survivors qualify, the payment is 10 months of the average salary. Under the Labor Pension System, survivors receive a lump sum plus 50% of the average monthly salary for the last 6 months if the insured dies before claiming benefits. If the insured was receiving a permanent disability pension, half of that amount is paid instead. Additional survivors can receive up to 20% extra.
Under the National Pension program, when an insured employee dies before claiming benefits or dies during the effective period of insurance, their survivors are entitled to a monthly pension of 1.3% of the average monthly salary for each insurance coverage year. The minimum pension is TWD 4,049 per month.
Invalidity Benefits
In Taiwan, the mandatory Labor Insurance program provides benefits for temporary and permanent disabilities, offering hospitalization, medical, and disability pensions. For occupational injuries, the benefits are higher and include lump-sum compensation options. Permanent disability benefits are based on years of coverage and the severity of the disability, with additional allowances for dependents in specific cases.
The Labor Pension System offers individual accounts for employees, and early pensions can be claimed in case of disability before the age of 60.
The National Pension Insurance provides a disability pension for those with severe disabilities, contingent on residency, income, and asset conditions, with payments calculated based on the insured amount and coverage years with a minimum pension of TWD 5,437. However, individuals cannot receive multiple disability benefits simultaneously.