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New regulations on social pension benefits in Vietnam’s draft revised Law on Social Insurance

Vietnam’s draft revised Law on Social Insurance adds regulations on social pension benefits for a part of senior citizens who do not have a pension as well as other benefits to maintain a minimum life.

Clause 2, Article 3 of the Draft Law on Social Insurance stipulates that a social pension is a policy where the state budget provides an allowance for the elderly who do not have a pension, or other monthly social insurance.

In order to ensure social security, provide an allowance to ensure the necessities of grandparents who do not have a pension or other types of income to maintain their lives, the state budget will deduct an expense to support for them.

Proposing this policy is considered one of the advancements of Vietnam Social Insurance in particular and the whole country in general in the orientation of building a multi-tiered social insurance regime and system, ensuring that people of all walks of life and all ages have access to certain support.

Social pension benefits

According to the provisions of the Draft Law on Social Insurance of Vietnam in 2023, the beneficiaries of social pension support are Vietnamese citizens who are full 60 years of age or older and have reached the retirement age as prescribed by Vietnam law (Will be 62 for men from 2028 and 60 for women from 2035).

Conditions for enjoying social pension benefits include:

– Subject to the above social pension benefits.

– Be 80 years old or older (Currently).

– Have no pension, other monthly social insurance allowance.

In particular, the regulation on full 80 years of age and over seems to be in conflict with the regulations on subjects applying from 60 years of age and/or retirement age from 60 and 62. This is because the number 80 is issued based on the situation of the Social Insurance Fund from time to time, currently applied at a high level to ensure no disturbance in society.

Over time, the ability of the state budget to provide people eligible for retirement benefits will increase and therefore, the age of requirement will gradually decrease, from 80 years old to a minimum of 60 years old.

Social pension scheme

Article 27 of the Draft Law on Social Insurance of Vietnam proposes social pension benefits including the following regimes:

– Monthly social retirement allowance: Subjects receiving monthly social retirement allowance are entitled to a subsidy of 500,000 VND/person/month.

– Health insurance: Persons who are enjoying monthly social pension benefits shall be issued with a health insurance card in accordance with the law on health insurance.

– Funeral allowance: If the person currently enjoying the social pension dies, the person in charge of the funeral will receive a lump sum funeral allowance of VND 10,000,000.

Important Notes

In order to enjoy the monthly social pension benefits, the eligible persons themselves need to request and register with the agency carrying out the procedures for social pension benefits (currently not regulated by the Government) rather than default receive of monthly social pension benefits.

Thereby, in order to avoid missing out on their benefits, as soon as they are eligible, beneficiaries need to register with the competent authority, avoid the thinking that the benefits will accumulate from the time they are eligible until the moment they decide to register.

In addition, employees who are not yet old enough to receive their monthly pension, if they so desire, can still apply for a monthly social pension as an amount to support living expenses in the time gap between the time of retirement and the time of retirement.

This is considered a policy that reflects the aspirations of Vietnamese people and workers when one of the many negative comments about the insurance fund recently is that the people have no income during the period between the moment when they were out of job and when they were old enough to receive a pension.

There is no other way so they are forced to withdraw their lump sum social insurance to cover living expenses.

However, with a subsidy of 500,000 VND a month, this amount will not be enough for employees to live considering the current price of necessities. Thereby, they will still need to take other measures to cover costs. However, if approved, this will be considered a significant amount of support to help people and employees in difficult times.

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