Lawmakers yesterday urged the Council of Labor Affairs (CLA) to lower interest rates on the labor insurance loan program and increase the loan quota to help the poor amid deteriorating economic conditions.
If the proposed measures are approved, this year’s loan would be offered to more people than ever before, and at the lowest interest rate in the entire history of the loan.
At the legislature’s Health, Environment and Labor Committee meeting yesterday, lawmakers across partylines said that given such harsh economic conditions, the council should exert even more efforts to help the poor.
In the past, the council has provided labor insurance loans of up to NT$100,000 to workers who have been enrolled in the labor insurance program for at least 15 years and do not have a bad record in paying labor insurance fees. The council has launched the program almost every year before the Lunar New Year to help the needy get through the holiday.
Although the council has not officially announced the details of the loan program, several CLA officials have said that the conditions were likely to be similar to previous years. In the past, the council has set a quota of NT$10 billion (US$300 million) in order to benefit 100,000 workers.
Chinese Nationalist Party (KMT) Legislator Ho Tsai-feng (侯彩鳳) said the NT$10 billion quota would not be enough this year.
Last year, when the unemployment rate was 3.83 percent — meaning 414,000 people were out of work — the council set aside NT$10 billion for the loan, Ho said.
Now that the unemployment rate has climbed to 4.37 percent, or 476,000 people, the quota should be increased to at least NT$20 billion, she said.
Legislators also questioned the council on why the interest rate of the loan was so high, even though it was intended to benefit those who were already struggling to make ends meet.
The average deposit rate of the labor insurance fund was 2.35 percent. Add in a processing fee of 0.6 percent, it was unreasonable to offer loans at an interest rate higher than 2.95 percent, Ho said.
“Since the loan is offered to those who really need it, [the council] should consider increasing the [maximum amount of the loan] from NT$100,000 to NT$200,000,” KMT legislator Cheng Ju-fen (鄭汝芬) said.
In response, CLA Minister Jennifer Wang (王如玄) said she was concerned about the financial condition of the labor insurance fund, but that the council would evaluate easing restrictions on the loan to benefit more workers, “even if it means we will have to borrow money.”