Employees Earning Minimum Wage to be Exempted in Paying Contributions
Starting February 1st all employees that are earning 1,500 yuan a month or the minimum wage in Shenzhen will be exempted from paying monthly contributions to the city housing provident fund. The housing provident fund is a program that helps buy, decorate and build apartments with the contributions the employees and employers contributing each month.
Employers of exempted employees still need to pay the obligatory monthly contribution to the housing provident fund. Local residents then can make withdrawals from the housing fund when they need to pay rent and mortgage loans. Last year around 400,000 residents made withdrawals for the housing funds that amounted to 2.6 billion yuan. By September this year employees can now use the funds to apply for mortgage loans.
The management center is inviting legislators, financial experts and housing policies and ordinary residents to give suggestions and opinions regarding a drafted related policy that will center on the loan application.
According to a national regulation the monthly contribution paid by the employees and employers may be used by the employees to build, buy, repair and renovate homes. However any individual cannot use the funds for any other purposes.