Increase the minimum pension from 2023 in Vietnam

According to Article 54 of the Law on Social Insurance 2014, as amended by Point a, Clause 1, Article 219 of the Labor Code 2019, employees who have reached the retirement age and have paid social insurance premiums for full 20 years or more will be entitled to a pension. The pension received each month will depend on the social insurance contributions for at least 20 years of working of the employees and the total number of years of contribution is up to 35 years for men and 30 years for women. From July 2023, the minimum pension of employees will be increased according to the policy of increasing the base salary.

After a period of discussion and voting, the National Assembly officially approved the proposal to increase the base salary from 1.49 million VND to 1.8 million VND effective from July 2023.

According to Clause 5, Article 56 of the Law on Social Insurance 2014, the lowest monthly pension of employees participating in compulsory social insurance who are eligible for pension under the provisions of Articles 54 and 55 of the Law on Social Insurance 2014 is equal to the base salary, except for the cases specified at Point i, Clause 1, Article 2 and Clause 3, Article 54 of the Law on Social Insurance 2014.

Thereby, when the base salary increases to 1.8 million VND in July 2023, the minimum pension that retired employees will receive is 1.8 million VND/month. If the pension received after calculating the payment process is lower than 1.8 million VND, the pensioner will be increased to a minimum of 1.8 million VND per month.

During the period from now until June 30, 2023, the minimum pension of pensioners will remain at VND 1.49 million equivalent to the current base salary.

Currently, the minimum wage for workers in Region IV is 3.25 million VND per month as regulated in Decree 38/2022/ND-CP. If the employee pays the full 20 years and retires, receiving the 45% benefit, the employee will only receive 1.46 million VND a month’s pension. Not to mention, if the employee decides to retire early before reaching retirement age, 2% will be deducted for each previous year of leave.

Clause 2, Article 169 of the Labor Code 2019 stipulates: “The retirement age of an employee under normal working conditions is adjusted according to the roadmap until they reach the age of 62 for male employees in 2028 and 60 for female employees by 2035.”

In many regions in Vietnam today, the cases of receiving a pension below the minimum pension are still high due to many reasons, mainly because the current retirement age is too high, forcing workers to retire early, thereby deducting the benefit rate.

For those who have a very low pension and are not eligible to live, the Government will support the minimum pension of 1.8 million VND per month.

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