One of the reform contents in Resolution No. 28-NQ/TW is to build a multi-tiered social insurance system, including social retirement benefits, basic social insurance, including compulsory and voluntary social insurance, and supplementary retirement insurance. At the same time, enhancing the connection and support between social insurance policies and the flexibility of these policies aim to achieve the goal of expanding coverage according to Resolution No. 28-NQ/TW: by 2030, approximately 60% of the elderly should receive retirement pensions, monthly social insurance, and social retirement benefits.

Amending the Law on Social Insurance: Supplementing social pension benefits to form a multi-layered social insurance system (Illustrative image)

As of the end of 2022, there were about 14.4 million people over the retirement age (55 for women and 60 for men) nationwide. However, the total number of people receiving pensions, monthly social insurance, and social retirement benefits was over 5.1 million, accounting for about 35% of the total number of retirees.

Therefore, the draft amendment of the Social Insurance Law has supplemented Chapter III on social retirement benefits, stipulating:

Vietnamese citizens aged 75 and above without pensions, monthly social insurance, and other monthly social benefits will receive social retirement benefits provided by the state budget. The level of social retirement benefits will be determined by the Government in accordance with the economic and social development conditions and the capacity of the state budget at each period. The state encourages localities, depending on their economic and social conditions, budget balancing capacity, to mobilize additional social resources for support. The draft law also tasks the Government with reporting to the National Assembly on the decision to gradually reduce the age for receiving social retirement benefits in line with the state budget's capacity over time. Reducing the age for receiving social retirement benefits from 80 to 75 will expand the coverage to an additional 800 thousand elderly people eligible for social retirement benefits and health insurance.

Workers who reach retirement age, have a period of contributing to social insurance (including both compulsory and voluntary contributions), but do not meet the conditions for a pension (less than 15 years of contributions) and are not yet eligible for social retirement benefits (not yet 75 years old) can choose to receive monthly allowances paid by the social insurance fund for the period before reaching the age for social retirement benefits. The amount depends on the contribution period, salary, and monthly income of the worker during the contribution period. During the period of receiving monthly allowances, the worker will also have health insurance contributions covered by the state budget.

For example, a worker with a contribution period of 5 years and a monthly salary for social insurance contributions at the current compulsory average rate (5,800,000 VND). If the worker opts not to receive a one-time social insurance payment and chooses to receive monthly allowances, they may receive the minimum amount equivalent to the social retirement benefit from the time they reach retirement age, instead of waiting until the age of 75.3

The National Assembly Standing Committee on Thursday gave opinions on the draft amended Law on Social Insurance, focusing on the proposal that elderly people who did not receive a pension or other monthly social insurance benefits would be eligible for social retirement allowances provided by the State budget.

An important part in the draft amended law was the addition of social retirement benefits to establish a multi-tiered social insurance system in accordance with Resolution No 28-NQ/TW. The draft law stipulated that Vietnamese citizens aged 75 and above, without receiving pensions or other monthly social insurance benefits, would be entitled to receive social retirement benefits.

This aimed to achieve the target of having approximately 60 per cent of people after retirement age receiving monthly pensions, regular social insurance benefits, and social retirement benefits by 2030.

During the session, Minister of Labour, Invalids, and Social Affairs Đào Ngọc Dung reported that under the new regulations, employees who reached retirement age but paid social insurance premiums for less than 15 years or those who had not yet reached the age of 75 to receive retirement benefits as stipulated would be eligible for monthly benefits.

They would also be covered by health insurance while receiving monthly benefits. The amount of the monthly allowance would depend on the employee’s insurance contribution period, salary, monthly income and would be maintained until they reached the eligible age or the insurance contribution period required to receive social retirement benefits, he explained.

Dung emphasised that this regulation would increase the number of monthly benefit recipients without significantly increasing the budget expenditure.

As of the end of 2022, Việt Nam had approximately 14.4 million people beyond retirement age (55 for women and 60 for men and above). The total number of individuals receiving pensions, monthly social insurance benefits, and social retirement benefits was over 5.1 million, accounting for about 35 per cent of the total retired population.

The number of elderly individuals benefiting from this policy would be more than 800,000.

Dung also said that the amended draft law stipulated that employees who had contributed for a minimum of 15 years upon reaching retirement age would be eligible for monthly pensions.

This provision aimed to create opportunities for those who joined social insurance at the ages of 45-47, or engaged in specialised short-term work that prevented them from accumulating the required 20 years of contributions.

It would provide them with the chance to receive monthly pensions and ensure healthcare insurance coverage upon retirement age.