Housing provident fund refers to the long-term housing savings deposited by state organs and institutions, state-owned enterprises, urban collective enterprises, foreign-invested enterprises, private enterprises in cities and towns, other urban enterprises and institutions, private non-enterprise units, social organizations and their working staff on an equal basis.
In 2011, the Ministry of Housing and Urban-Rural Construction is jointly working with various departments to study and revise the Regulations on the Management of Housing Provident Fund, and to liberalize the provisions on individual withdrawal of provident fund for housing rent payment. In 2013, some cities introduced measures to allow workers suffering from major diseases or their immediate relatives to withdraw provident fund for emergency relief.
In 2014, the three departments issued a document to cancel the housing provident fund personal housing loan insurance, notarization, new housing evaluation and compulsory institutional guarantee and other fee items, so as to alleviate the burden of loan workers.
In 2015, the Regulations on the Management of Housing Provident Fund (revised draft for examination) intends to stipulate that the deposit ratio of workers and units of housing provident fund shall not be less than 5% or more than 12%. From February 21, 2016, the interest rate of employees’housing provident fund account deposits has been adjusted to the benchmark interest rate of one-year fixed deposits. The interest rate after the increase is 1.50%.
From July 1, 2017, all the national housing provident fund management centers will handle the transfer and continuation of housing provident fund in different places through the platform according to the requirements of the “Operation Rules for the Transfer and Continuation of National Housing Provident Fund in different places” issued by the Ministry of Housing and Construction. All national housing provident fund management centers will “network” through a unified platform for the transfer of housing provident fund business in different places. According to incomplete statistics, more than 20 cities, such as Beijing, Shanghai, Fuzhou and Guangzhou, have access to the transfer platform of the National Housing Provident Fund. On May 15, 2018, the Beijing Housing Provident Fund Management Center issued the Notice on the Cancellation of Copies of Identity Certificates as Requirements for the Collection of Housing Provident Fund and the Processing of Loan Business.
Housing accumulation fund refers to the long-term housing reserve deposited by state organs, state-owned enterprises, urban collective enterprises, foreign-invested enterprises, private enterprises in cities and towns and other urban enterprises, institutions, private non-enterprise units, social organizations and their employees.
The definition of housing provident fund includes the following five aspects:
(1) Housing provident fund is only established in cities and towns, but not in rural areas.
(2) Only on-the-job workers can establish the housing provident fund system. Urban residents without jobs and retired workers do not implement the housing accumulation fund system.
(3) Housing provident fund consists of two parts, one part is deposited by the unit where the staff and workers work, the other part is deposited by the individual staff and workers. The personal deposit of employees shall be withheld by the unit and deposited into the individual account of housing accumulation fund together with the deposit of the unit.
(4) The long-term nature of housing provident fund deposit. Once the housing provident fund system has been established, the staff and workers must pay in accordance with the regulations uninterruptedly during their working period. Except for the retirement of the staff and workers or other circumstances stipulated in the Regulations on the Administration of the Housing Provident Fund, they may not suspend or interrupt it. It embodies the stability, unity, standardization and mandatory of housing provident fund.
(5) Housing provident fund is the personal housing reserve fund which is specially used for housing consumption expenditure stored by workers according to regulations. It has two characteristics:
First, the accumulation, that is, housing provident fund is not an integral part of workers’wages, not in the form of cash, and must be deposited in the housing provident fund management center in the entrusted bank to open a special account management.
Second, the special purpose of housing provident fund, the storage period can only be used for purchasing, building, overhauling self-housing, or paying rent. Employees can withdraw the housing provident fund in their accounts only when they retire, die, lose their working ability completely and terminate their labor relations with the unit or move out of their original residence city.
According to China’s regulations, enterprises should deposit housing provident fund for employees, regardless of state-owned enterprises and private enterprises.
The part of housing provident fund paid by enterprises and institutions does not belong to the attributes of total wages, but belongs to the expenditure of the nature of enterprise cost and expense. According to the Notice of the State Administration of Taxation on Deduction of Enterprise Wages and Salaries and Workers’Welfare Expenses (State Tax Letter 3), the term “total salaries and salaries” referred to in Articles 40, 41 and 42 of the Implementation Regulations of the Enterprise Income Tax Law of the People’s Republic of China refers to enterprises in accordance with document No. 3 of the State Tax Letter  Article 1 stipulates the total wages and salaries actually paid, excluding the social insurance premiums and housing provident fund such as the employee welfare premiums, the employee education funds, the trade union funds, the old-age insurance premiums, medical insurance premiums, unemployment insurance premiums, industrial injury insurance premiums and maternity insurance premiums borne by enterprises.
(1) Guarantee, the establishment of the staff housing accumulation fund system, for the staff to solve housing problems faster and better provide security;
(2) Mutual assistance, the establishment of housing provident fund system can effectively establish and form a mechanism and channels for housing workers to help workers without housing, and housing provident fund in terms of funds to help workers without housing, reflecting the mutual assistance of housing provident fund for workers;
(3) For a long period of time, every working worker in a town must pay the individual housing accumulation fund from the date of taking part in the work to the time of retirement or termination of labor relations; the unit where the worker works should also pay the housing accumulation fund for the worker’s subsidy according to the regulations.
(1) Generality, urban employees, regardless of the nature of their work units, family income and whether they have housing, must deposit housing accumulation fund in accordance with the provisions of the Regulations;
(2) Compulsory (policy nature). If a unit fails to register the deposit of the housing accumulation fund or to set up an account of the housing accumulation fund for its employees, the management center of the housing accumulation fund has the power to order it to do so within a time limit. If it fails to do so within the time limit, it may be punished in accordance with the relevant provisions of the Regulations and may apply to the people’s court. Enforcement;
(3) Welfare, apart from the housing provident fund deposited by employees, units should also pay a certain amount of money for employees, and the interest rate of housing provident fund loans is lower than that of commercial loans;
(4) Returnability, the retirement of employees, or the complete loss of labor capacity and termination of labor relations with the unit, the removal of household registration or outbound settlement, etc., the housing provident fund deposited will be returned to the individual employees.