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Official Gazette

Tuesday, May 30, 2023

Draft amended Social Insurance Law offers more benefits to the insured

Updated: 12:03’ - 09/04/2023
The Ministry of Labor, Invalids and Social Affairs (MOLISA) is gathering public comments on a draft amended Law on Social Insurance which is scheduled to replace its 2014 version from 2025.

With 133 articles arranged in nine chapters, the draft law introduces a raft of new policies regarding social pension benefits for seniors without pension, conditions for enjoying monthly pension and determination of pension rates, settlement of one-off withdrawal of social insurance benefits, and maternity regime for those participating in social insurance on a voluntary basis.

Non-contributory pension benefits for seniors without pension

In order to better ensure livelihood for seniors without pension, the draft law proposes a package of benefits for these subjects.

According to Article 26 of the draft law, Vietnamese citizens who are aged full 80 years or older and do not have pension or other monthly social security benefits would be entitled to an allowance amount of VND 500,000 per month and health insurance-covered medical examination and treatment. Meanwhile, those who take charge of funeral for these seniors would receive a lump-sum funeral allowance of VND 10 million.

The Government would be vested with the power to gradually reduce the age threshold for enjoying social pension benefits corresponding to capacity of the state budget in each period.

For the time being, social pension benefit is regulated under Decree 20 of 2021.

Conditions for enjoying monthly pension and determination of pension rates

Under the draft law, employees working under normal conditions and having reached the law-prescribed retirement age would be entitled to monthly pension if having paid compulsory or voluntary social insurance premiums for at least full 15 years, five years earlier than currently. Those who have reached the retirement age but yet to meet conditions for enjoying pension would be entitled to a monthly allowance equaling the social allowance level.

Pension rates as well as the method for calculating pension rates would also be changed in line with new regulations.

Accordingly, the monthly pension of an employee would be calculated based on the rate of pension benefit and the average monthly salary on which social insurance premiums are based.

Social insurance officers guide seniors to carry out procedures for receiving pensions in Ben Nghe ward, Ho Chi Minh City__Photo: Internet

In case of a male worker who has paid social insurance premiums for between 15 years and under 20 years, for each year of participating in social insurance, he would enjoy a pension benefit rate of 2.25 percent, corresponding to a monthly pension rate of 33.75-42.75 percent of the average monthly salary.

As for those who have participate in social insurance for full 20 years, for men, or full 15 years, for women, the pension benefit rate would be 45 percent of the average monthly salary. From the 21st year or 16th year on, employees would be entitled to an addition of 2 percent to the pension benefit rate for each year of premium payment. Hence, in order to enjoy the maximum rate of 75 percent, a male employee must pay social insurance premiums for full 35 years, and a female employee, full 30 years. If having paid social insurance premiums for more than 35 years, for men, or for more than 30 years, for women, employees would receive a lump-sum allowance corresponding to the number of excessive years.

Employees who are qualified for enjoying pension but the period of social insurance premium payment is shorter than 15 years (workers performing heavy or hazardous jobs, persons suffering reduction of working capacity; and employees falling into special cases) would enjoy the pension benefit rate of 2.25 percent for each year of participation in social insurance.

Meanwhile, those who retire before reaching the law-prescribed age would be subject to a reduction of 2 percent of the pension benefit rate for each year of early retirement.

Two options for one-off withdrawal of social insurance benefits

Under the 2014 Law, an employee who has paid social insurance premiums for less than 20 years may request for one-off payout of social insurance benefits after 12 months from the time he/she stops paying social insurance premiums.

The MOLISA proposes two options to settle such request.

The first option says that the employee may receive full payout for the entire period of participating in social insurance and then would not be entitled to monthly pension.

As per the second option, the employee would receive a one-off payment of benefits for at most half of the period of contribution to the retirement and survivorship allowance fund. The remaining period would be reserved for calculation of social insurance benefits when the employee reaches the retirement age.

Maternity regime for voluntary social insurance participants

Under the current law, the voluntary social insurance scheme only covers retirement and survivorship regimes. The draft law now adds maternity benefits to voluntary social insurance.

To be entitled to maternity benefits, workers must have paid social insurance premiums for at least full six months within 12 months before childbirth.

Female workers would receive a maternity allowance of VND 2 million for each child. Meanwhile, male employees would be entitled to benefits when their wives give birth. 

The state budget would cover full payment of maternity benefits for voluntary insurance participants.
The draft is scheduled to be adopted by the National Assembly in October next year.- (VLLF) 

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