The Social Insurance Law (SI) 2024 will officially take effect from July 1, 2025 with many new points directly affecting the rights of employees and retirees.
Here are 7 notable points that people need to understand:
1. It is easier to withdraw one-time social insurance
Employees participating in social insurance after July 1, 2025 will not be able to withdraw social insurance at one time except in special cases such as: being old enough to retire but not having paid for 15 years, settling abroad, having serious illness, having a reduced working capacity of 81% or more, or having paid social insurance before the effective date of the law but not yet 20 years and having stopped participating for 12 months.
2. Expanding benefits for overseas workers
The new law allows the total social insurance payment period in Vietnam and abroad if there is a bilateral agreement between the countries. Thus, Vietnamese workers working abroad have more opportunities to calculate pensions, ensuring the same rights as domestic workers.
3. Reducing pension benefits to 15 years
Instead of requiring a minimum of 20 years of social insurance contributions as before, from 2025, employees only need to have 15 years of social insurance contributions to be eligible for pension if they are old enough to retire. This helps millions of workers have the opportunity to receive pensions more easily.
4. Supplementing the method of calculating pensions for people who have paid social insurance for less than 20 years
The 2024 Social Insurance Law stipulates that employees with a social insurance payment period of 15 to less than 20 years will be calculated the pension rate according to the new formula, with each year of contribution being calculated at 2.25% of the average salary.
5. Reducing the age of receiving social pension benefits
From July 1, 2025, the age of receiving social pension benefits will be reduced from 80 to 75. In particular, people from poor or near-poor households from the age of 70 will also enjoy this policy, contributing to improving the security of the elderly.
6. Encourage holding social insurance instead of withdrawing it once
The new law increases the rights of people who reserve their time participating in social insurance such as receiving pensions, being covered by the social insurance fund for health insurance, and receiving monthly allowances if they are not eligible for pensions. This is a step to limit the mass withdrawal of social insurance in recent times.
7. Supplementing social pension benefits
Social pension benefits are officially legalized, applied to the elderly without pensions or monthly social insurance benefits. People only need to be 75 years old, do not have any other allowances and have a request to receive support from the state budget.
