Council of Labor Affairs (CLA) Minister Jennifer Wang (王如玄) yesterday defended the council’s decision to offer labor insurance loans at an interest rate of 2.935 percent, saying that if the interest rate were any lower, the benefits of 8.8 million workers would be adversely affected.
Despite Wang’s comments, legislators passed an impromptu motion prohibiting the loan rate from exceeding 1.92 percent during the legislature’s Health, Environment and Labor Committee meeting.
The labor loan insurance program was designed to help workers in poor financial conditions by giving them loans of up to NT$100,000 (US$3,035) based on their past record of paying labor insurance fees and several other conditions. The council started accepting loan applications two weeks ago, and so far, more than 100,000 people have applied. The number of applicants this year is expected to be the highest in the history of the loan program.
However, the council was criticized by legislators and union representatives for not offering lower rates, since the loan is intended to help the poor. Legislators said the housing loan offered to civil servants and teachers was at an interest rate of only 1.92 percent, so it would be unfair to offer loans at an interest rate higher than this level to struggling workers.
Wang defended the higher interest rate by expressing concern about the financial condition of the labor insurance fund.
“Because the loans are paid out from the labor insurance fund, it would not be fair to the 8.8 million workers, whose benefits could be affected,” she said.
The loan plan originally called for council officials to review and adjust the interest rate, if necessary, once every six months. However, Wang conceded yesterday by agreeing to review the loan interest rate within one month at the earliest.