The Law regulates the rights and obligations of competent authorities, organizations, and individuals toward:

The implementation of SI;

Social pension benefits;

Registration and management of SI collection and payment;

Regimes and policies for both compulsory and voluntary SI;

Social Insurance Fund;

Supplementary pension insurance;

Complaints, denunciations, and handling of SI violations; and

State management of SI.

The new law introduces amendments that address current inadequacies between legislation and real-life practice, while expanding rights and benefits for SI participants.

Among its various goals, the new law aims to  better ensure SI rights for Vietnamese workers abroad and foreign workers in Vietnam. A notable effort is the introduction of more attractive rights to encourage participants to reserve their contributions in SI to enjoy pensions instead of opting for one-time SI payments.

Key changes in the 2024 Social Insurance Law

The draft bill has been amended and supplemented with 11 chapters comprising 141 articles, presenting nine key legal changes:

State-ensured social pension: The law stipulates that the social pension is partly ensured by the State, building on existing regulations for monthly social subsidies for the elderly.

Interconnection in SI system: It introduces a monthly subsidy for the period before reaching the age for social pension allowance, during which the State provides healthcare insurance.

Expanded mandatory SI coverage: The law expands the mandatory social insurance coverage.

Increased benefits for SI participants: Benefits include reduced minimum years of SI contributions required to receive monthly pensions and maternity benefits for voluntary SI participants.

Separate chapter for SI premium collection and contribution: This chapter regulates the collection and contribution of SI premiums, clarifying the handling of delayed and evaded contributions.

New “reference level” for calculations: The law replaces the “statutory pay rate” or “base salary” with a “reference level,” a government-prescribed monetary amount for calculating SI premiums and benefits.

Specific regulations on SI fund investment and management: It provides more specific regulations on the investment and management of the SI fund, including the approval and appraisal of organizational expenditure and SI operations.

Simplified administrative procedures: The law simplifies administrative procedures related to SI, electronic transactions, and assesses people’s satisfaction with the implementation of SI policies and regimes.

Base money amount for compulsory SI payment

Point dd, Clause 1, Article 31 of the new law stipulates, at the time of payment, the salary used as a basis for paying compulsory SI must:

be at least equal to the regional wage plus 7 percent for the trained job; and

not exceed 20 times the reference level (also called: statutory pay rate”).

SI payment rates for non-salaried positions

The current law does not specify the SI payment rates for non-salaried positions, such as business manager, representative of state capital portion, representative of enterprise capital portion, member of the board of directors, general director, director, member of the board of supervisors or controller, etc.

However, according to Clause 4, Article 33 of the Law on Social Insurance 2024, the monthly SI payment for these subjects will be set as follows:

For the sickness and maternity fund, 3 percent of the monthly income on which SI premiums are based; and

For the retirement and death insurance fund, 22 percent of the monthly income on which SI premiums are based.

Compulsory SI payment for extended sick leave period

A new provision in Clause 6, Article 33 of the 2024 Social Insurance Law stipulates the following regarding SI payment during extended sick leave:

SI payment is required if an employee takes sick leave for 14 working days or more during their first work month or the first month of returning to work.

If an employee takes sick leave for 14 working days or more at any other time, they are not required to pay SI for that month, unless there is an agreement between the employer and the employee to continue SI payments for that month, based on the same basis as the most recent month.

Changes in late payment and payment evasion

While the existing law does not contain official definitions of late payment and payment evasion for SI and unemployment insurance (UI), Articles 38 and 39 of the new law clearly identify the differences between them.