As compared to the Law on Social Insurance 2014, the revised law introduces significant changes aimed at achieving broader objectives: expanding the scope of participation; increased rights and benefits to attract more labourers joining the social insurance system, ensuring long-term social welfare for the people; basically amending obstacles and shortcomings existing in the actual implementation of the Law on Social Insurance 2014; stricter sanctions for delays and evasion of social insurance premiums.

National Assembly deputies vote to approve the Law on Social Insurance (revised). Photo quochoi.vn

1. Broadening social insurance subjects

One of the reform requirements in Resolution No 28-NQ/TW is to “Expand the mandatory social insurance coverage to other groups”; “Review and expand the mandatory social insurance coverage to household business owners, business managers, unpaid managers of cooperatives, and employees working on a flexible basis”.

The Law on Social Insurance (revised) institutionalises Resolution No  28/NQ-TW, mandating compulsory participation for additional groups:

(i) Business owners as prescribed by the Government;

(ii) Executives, supervisors, state capital representatives, enterprise capital representatives in companies and parent companies as prescribed in the Law on Enterprises; members of the Board of Directors, General Director/Director, members of the Board of Supervisory or supervisors, and the unpaid managers of cooperatives and cooperative unions as prescribed in the Law on Cooperative;

(iii) Employees who work part-time, with monthly wage equal to or higher than the minimum monthly wage used to determine compulsory social insurance contribution;

(iv) In cases where employees and employers agree under a different name but with content that reflects paid works, wages, and the management, operation, and supervision by one party, etc.

Besides, in line with the spirit of Resolution No 28-NQ/TW on reforming the social insurance system, the amended Law on Social Insurance outlines a gradual approach towards mandatory social insurance coverage for all employed individuals with income and wages subject to the fulfillment of necessary conditions.  To achieve that objective, the Law assigned the National Assembly Standing Committee to made decisions regarding the mandatory participation of employed individuals with stable and regular income, based on proposals from the Government that align with the socio-economic conditions of each period.

The introduction of this provision ensures compatibility with the regulations of the Labour Code 2019, whilst ensuring added rights and benefits as these additional participating groups contribute to increasing social insurance coverage.

2. Introducing social pension allowance to form a multi-layered social insurance system aligning with Resolution No 28-NQ/TW on reforming social insurance policy

Statistics show that by the end of 2022, Vietnam had approximately 14.4 million people past retirement age (55 years old and above for women; 60 years old and above for men). However, the total number of individuals receiving monthly pension and social insurance benefits, and social pension allowance stood at over 5.1 million, representing only about 35 per cent of the retirees.

One of the reforms stipulated in the Central Party Committee’s Resolution No 28-NQ/TW is to establish a multi-layered social insurance system, encompassing: (i) Social Pension Allowance; (ii) Basic social insurance which includes both mandatory and voluntary social insurance contributions; (iii) Supplementary pension insurance. The ultimate goal of the multi-layered approach is to ensure that by 2030, approximately 60 per cent of retirees will have access to monthly pension, social insurance benefits and social pension allowance.

The revised Law on Social Insurance also includes provisions for employees who are not qualified for pension benefits and are not yet eligible for social pension allowance

Vietnamese citizens who have reached the retirement age and have contributed to social insurance but do not meet the conditions for pension benefits (less than 15 years of contributions) and social pension allowance, can receive monthly allowances from their own contributions upon their need provided that they have not received lump-sum withdrawal or asked for reservation of their benefits. The duration and amount of the monthly allowance are determined based on the contribution period and the amount contributed. During the period of receiving the monthly allowance, health insurance contributions will be covered by the State budget.

3. Reducing the minimum social insurance contribution years from 20 to 15 for monthly pension benefits

Resolution No 28-NQ/TW sets out the task of reform: “Amending the conditions for enjoying retirement benefits in the direction of gradually reducing the minimum number of years of social insurance contribution required to be eligible for retirement benefits from 20 years to 15 years, aiming to eventually reach 10 years with an appropriate benefit level to enable older labourers with limited years of social insurance contribution to access and enjoy social insurance benefits.”

The Law on Social Insurance (revised) stipulates that employees who have reached the retirement age and have paid insurance contributions for at least 15 years are entitled to monthly pension benefits.

The Law also specifies the pension benefit rates for male and female workers who have contributed to social insurance for 15 years. The maximum pension benefit rate is 75 per cent.

4. Including maternity benefits in voluntary social insurance

According to Resolution 28-NQ/TW, the voluntary social insurance system, which currently covers retirement and funeral benefits, will gradually expand to include other benefits.

Therefore, the Law on Social Insurance (revised) stipulates that voluntary social insurance participating employees (including both female and male employees) are entitled to a benefit of VND2 million for each child born and each fetus that dies in the womb after 22 weeks of gestation or during delivery if they have paid social insurance for at least 6 months in the 12 months before childbirth.

Funding for this benefit will be guaranteed by the State budget and the Government will decide to adjust the maternity benefit level in accordance with socio-economic conditions and the State budget capacity at each period.

 National Assembly deputies press buttons to approve the Law on Social Insurance (revised). Photo quochoi.vn

5. Revising regulations for lump-sum social insurance benefits

Resolution No 28-NQ/TW sets the direction: “There must be appropriate regulations to reduce the withdrawals of lump-sum social insurance benefits, that is, increase benefits if the participation period is preserved for retirement entitlement, and vice versa reduce benefits if participants withdraw lump-sum social insurance benefits.”

To implement the Resolution, the Law on Social Insurance (revised) introduces many provisions aimed at increasing benefits, enhancing attractiveness, and encouraging employees to preserve their social insurance contribution period for pension allowance instead of receiving lump-sum benefits, such as:

(i) easier conditions for receiving pension benefits (reducing the minimum contribution period from 20 years to 15 years;

(ii) monthly allowances and health insurance contributions paid by the state in cases where the social contribution period is not sufficient for retirement pension eligibility and the age for receiving social pension allowances has not been reached;

iii) In cases where employees are eligible for retirement pensions according to regulations and continue to contribute to social insurance, the one-time retirement allowance will be calculated as twice the average monthly salary for each year of contribution, exceeding the corresponding number of years based on the retirement pension entitlement rate of 75 per cent from the point of reaching the statutory retirement age to the actual retirement age.

6. Supplementing provisions on handling delays and evasion of social insurance contributions

The Law stipulates the responsibilities of agencies in identifying and managing the subjects who are required to participate in social insurance; as well as specific regulations on the acts of late payment and evasion of social insurance contributions. Additionally, the Law supplements various measures to address the delays and evasion of social insurance contributions.

Furthermore, to ensure the rights and benefits of employees, the Law has adds the responsibility of employers to compensate employees if they do not participate or do not fully and timely participate  in compulsory social insurance system, causing damage to the legitimate rights and benefits of employees.

These provisions aim to further protect the just and lawful rights and interests of employees and contribute to reducing late payment and evasion of social insurance contributions.

VSS plays active role in developing social insurance policies and legislation

Over the past time, as a Government agency entrusted with the implementation of social insurance, health insurance and unemployment insurance policies, Vietnam Social Security (VSS) has tirelessly worked towards ensuring the well-being of and social welfare for the people. As a result of these endeavours, VSS has obtained many important achievements. And throughout this journey, VSS has placed great emphasis on the refinement and enhancement of social insurance policies and legislation.

 VSS General Director Nguyen The Manh attends the 15th National Assembly’s 7th sitting

Since 2022, in order to implement the National Assembly’s Resolution No 50/2022/QH15 dated June 13, 2022 on the formulation of laws and ordinances 2023, adjusting the programme for building laws and ordinances 2022, and assigned tasks in the Prime Minister’s Decision No 799/QĐ-TTg dated July 6, 2022, VSS has closely collaborated with the Ministry of Labour, Invalids and Social Affairs to draft the Law on Social Insurance (revised).

VSS has also collaborated in supplementing certain regulations on increased rights and benefits in entitlement, creating attractiveness, and attracting new participants as well as building trust in the system for the current participants. Additionally, VSS has collaborated in improving state management regulations on social insurance, the rights and responsibilities of social security offices as well as related organisations and individuals, and many other regulations in the draft law, contributing to developing a comprehensive social insurance system, and a professional, modern, efficient, transparent and open system of implementing social security policies./.