The Ministry of Finance proposes to recalculate the adjustment of pension and social insurance benefits to ensure suitability (Illustrative image)

According to MOF, preliminary estimates indicate an additional increase in the state budget expenditure for 2024 compared to the state budget expenditure for 2024 to implement the proposed plan by MOLISA, which includes a 15% increase in pensions and social insurance subsidies; a 29.2% increase in preferential subsidies for those with meritorious services (from 2,055,000 VND to 2,655,000 VND); and a 38.9% increase in social subsidies (from 360,000 VND to 500,000 VND).

With the aforementioned increases, the total expenditure estimation at 17,276 billion VND, exceeding the balancing capacity of the state budget estimate for 2024 as decided by the National Assembly, which is a maximum of 7,430 billion VND.

Therefore, MOF proposes that the MOLISA coordinate with relevant agencies to review and specifically determine the adjustment levels. This will be submitted to the authorized authorities for decision-making based on the balancing capacity of the state budget.

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According to MOF, there are currently various social and healthcare insurance regimes regulated by the Social Insurance Law, Occupational Safety and Health Law, Health Insurance Law, and some social security regimes (scholarships, support for educational expenses for certain students stipulated under the Education Law...).

Implementing the public sector salary reform from July 1, 2024 will directly impact the social, health insurance, and student regimes, as there will no longer be provisions regarding the base salary. However, as of July 1, 2024, the Social Insurance Law, Occupational Safety and Health Law, Health Insurance Law, and Education Law are still in effect, without replacemed documents.

Therefore, to ensure legal consistency and uniformity in implementation, MOF has proposed that the MOLISA take the lead and coordinate with the Ministry of Health, the Ministry of Education and Training (MOET), etc., to review and study the matter. This will be reported to the Government for submission to the National Assembly at the May 2024 session.

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MOF also stated that in the difficult conditions of balancing the central budget, the allocation of pension adjustments and some social security policies is very limited, while some localities still have surplus funds from large-scale salary reforms.

Therefore, to proactively manage the adjustment of policies and alleviate pressure on the allocation of central budget support to localities, MOF proposes that the MOLISA report to the authorized agencies. This report would allow the use of accumulated salary reform funds from the central budget and surplus salary reform funds from localities. This would be done after ensuring sufficient funds that  are allocated for salary reform needs to adjust pensions and the mentioned types of subsidies./.