In recent years, the Social Insurance Law has been instrumental in upholding the core principle of “contribution and entitlement” for social insurance policies and benefits. While this approach has yielded positive results, it has also brought to light certain challenges that warrant attention.
1. Overview
Over the past 7 years, the Social Insurance Law has effectively implemented the principle of “contribution and entitlement” of social insurance policies and benefits. Worker, along with the positive results achieved, the policies have also revealed limitations and shortcomings such as the actual number of participants and beneficiaries of social insurance is still low compared to its potential, compliance with social insurance laws is not high, slow payment and evasion of social insurance contributions still exist.
2. Explaination
With the aim of expanding and enhancing the rights and benefits, creating attractive incentives for workers to participate in social insurance, the draft law closely follows the following 5 amendment contents:
2.1. Supplementing employee’s social retirement benefits to establish a multi-level social insurance system
Vietnamese citizens who are eligible for retirement but do not receive pensions or monthly allowances will be entitled to social retirement benefits provided by the State budget. This regulation aims to ensure that by 2030, approximately 60% of individuals after retirement age will receive pensions, monthly social insurance benefits, and social retirement benefits.
2.2. Workers can choose to receive monthly allowances based on their social insurance contributions, wages, and income
This regulation applies to workers who meet the following criteria, worker who have:
• reached retirement age.
• not contributed to social insurance for at least 15 years.
• not reached the age of 75 (the age to receive social retirement benefits).
These individuals can choose to receive employee monthly allowances based on their social insurance contributions, wages, and income for the months they contributed to social insurance. During the period of receiving monthly allowances, they will also be entitled to healthcare insurance provided by the State budget.
2.3. Expanding the compulsory participation in employee social insurance
The draft Social Insurance Law stipulates the expansion of compulsory social insurance participation.
In addition, the draft also supplements compulsory social insurance participation similar to professional workers at the commune level for:
• Non-professional workers in villages and residential areas.
2.4. Adding benefits for health and maternity to non-professional employee at the commune, ward, and town
Non-professional workers have 2 benefits:
• Retirement benefits.
• Survivorship benefits.
The draft Social Insurance Law adds provisions that entitle these individuals to fully participate and benefit from all compulsory social insurance benefits like other eligible individuals. In addition, it also adds maternity benefits to the voluntary social insurance policy result in ensured by the State budget and participants will not have to pay any additional contributions.
2.5. Reducing the minimum years of social insurance contributions to receive retirement benefits
To provide opportunities for individuals with short periods of social insurance contributions to receive retirement benefits due to reasons such as:
• Late participation in social insurance.
• Interrupted participation.
The draft Social Insurance Law stipulates a reduction in the minimum years of social insurance contributions from 20 years to 15 years to receive monthly retirement benefits.
(Reference: Government Electronic Newspaper, June 12/2023)
- Harley Miller Law Firm “HMLF”
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- Website: hmlf.vn
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