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Official Gazette

Friday, May 7, 2021

Draft amended Law on Social Insurance gives more benefits to participants

Updated: 09:12’ - 01/05/2021
The Ministry of Labor, Invalids and Social Affairs (MOLISA) has proposed reducing the minimum period of social insurance premium payment for participants to enjoy pension from 20 years to 15 years, eventually 10 years, as from 2024.

The 2014 Law on Social Insurance provides that employees working in normal conditions and meeting the requirement on age of retirement will be entitled to pension if having paid social insurance premiums for at least full 20 years.

However, according to the MOLISA, the current requirement of 20 years is “too strict” and, as a result, employees can hardly accumulate enough years of social insurance premiums payment to enjoy pension. With the proposal of reducing the minimum period of social insurance premium payment, the ministry expects to encourage more people to participate in the social insurance system and provide employees with better protection against risks in the working process.

Also to expand the coverage of social insurance, the draft proposes adding subjects covered by compulsory social insurance, including owners of individual business households, business managers and unpaid managers of cooperatives. Compulsory social insurance would also cover such persons as civil servants, public employees and part-time employees at the commune level.

Revising conditions for enjoying lump-sum social insurance allowance, the MOLISA would give such allowance only to employees who reach retirement age but are not entitled to pension and have no need to continue paying social insurance premiums. Exceptional cases would be persons who settle abroad or suffer from fatal diseases and wish to receive lump-sum social insurance allowance.

Regarding compulsory social insurance premium level, the draft requires employers to make monthly social insurance premium payment for their employees with the lowest level equal to 70 percent of total average income of each employee. Such provision aims to prevent employers from paying social insurance premiums based on the lowest wage paid to employees without adding other allowances as currently.

The draft proposes that in case employers shirk paying social insurance and unemployment insurance premiums, the Vietnam Social Security (VSS) would certify period of insurance premium payment and settle all regimes for employees, provided that the state budget or other financial sources on behalf of employees make complete payment to social and unemployment insurance funds for employees. For ineligible employees, the VSS would certify period of social and unemployment insurance premium payment at the time employees stop working so as to reserve their previous periods of insurance premium payment.- (VLLF)
 

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