Employees of working age who participate in the compulsory social insurance regime will enjoy pensions and other welfare regimes when they are old. However, in Vietnam - a developing country, it is not uncommon for employees to not participate in social insurance contributions for various reasons. This is especially true among employees who are farmers or work in remote mountainous areas. Accordingly, for the group of employees over a certain age (75 or 80), even though they have never participated in the social insurance regime, the Vietnamese government will support them with a monthly social allowance.
For most employees, the old years will be the golden years of their lives, when they have both free time and money from a pension.
However, at present, the compulsory social insurance regime is only 'mandatory' for the group of employees working for Vietnamese enterprises.
For employees who do not work for the enterprise, they will only be able to receive a pension if they participate in the voluntary social insurance scheme. Any citizen of working age in Vietnam can participate in the voluntary social insurance scheme.
However, since there is no support from the business, they will have to pay approximately 3 times the amount they pay when working for the business.
This high cost is the biggest reason why Vietnamese employees do not participate in the social insurance regime. In fact, despite working in an enterprise, most employees also do not want to pay that relatively small amount of compulsory social insurance.
These reasons combined with the fact that specific regulations and laws on social insurance have only been popularized within the past two decades, make the number of people participating in the social insurance scheme in Vietnam still low.
It is expected that as time goes by, the number of people participating in the social insurance regime will increase, and accordingly, the number of elderly people receiving monthly social benefits from the Government of Vietnam will decrease.
Regulations on social benefits for the elderly
According to the provisions of Article 2 of the Law on Elderly 2009, the elderly people in Vietnam are Vietnamese citizens who are full 60 years of age or older.
According to the provisions of Clause 2, Article 4 of Decree 20/2021/ND-CP, the standard level of social benefits applied from July 1, 2021, is VND 360,000/month.
Accordingly, those eligible for the social allowance regime will be entitled to 360,000 VND/month, an increase of 90,000 VND/month compared to the old regulations at Point l, Clause 1, Article 6 of Decree No. 136/2013/ND-CP.
According to Clause 5, Article 5 of Decree 20/2021/ND-CP, the elderly people who are entitled to monthly social support are:
- The elderly who are in poor households, and have no people with obligations and rights to take care of them or have people with obligations and rights to take care of them but are receiving monthly social allowances;
- Elderly people from full 75 years old to 80 years old who belong to poor households or near-poor households that are not specified at Point a of this Clause who are living in special difficulties in communes and villages in ethnic minority areas and in mountainous areas;
- Elderly people aged full 80 years or older who are not specified at Point a of this Clause and do not have a monthly pension, social insurance allowance, or monthly social allowance;
- Elderly people who are in poor households, have no people with obligations and rights to take care of them, have no conditions to live in the community, are eligible for admission to social assistance establishments, but there are people who take care of them in the community.
The new monthly allowance for the elderly has been specified at Point dd, Clause 1, Article 6 of Decree 20/2021/ND-CP, specifically:
- Coefficient of 1.5 for subjects specified at Point a, Clause 5, from full 60 to 80 years old;
- Coefficient of 2.0 for subjects specified at Point a, Clause 5, who are full 80 years old or older;
- Coefficient of 1.0 for subjects specified at Points b and c, Clause 5;
- Coefficient of 3.0 for subjects specified at Point d, Clause 5.
According to the above regulations, elderly people in Vietnam will receive different amounts of benefits, depending mainly on their age and social status.
For the elderly under point c, who do not have a pension, monthly social insurance allowance, or monthly social allowance, they will receive a monthly allowance from the Government of 360,000 x 1.0 = 360,000 VND.
Originally published October 17, 2022
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
