Vietnam Social Security said that the regulations on one-time allowances upon retirement are stipulated in Article 68 of the Law on Social Insurance.
Accordingly, male workers with social insurance contributions of over 35 years and female workers of over 30 years, when retiring, in addition to pensions, will also receive a one-time allowance.
The allowance level is calculated as 0.5 times the average salary used as the basis for social insurance contributions for each year of contribution exceeding the prescribed number of years.
For employees who have met the conditions for enjoying pensions but continue to pay social insurance, the allowance level for the subsequent contribution period is calculated according to current regulations.
In the Summary Report on the implementation of the Law on Social Insurance No. 41/2024/QH15 compiled by the Ministry of Home Affairs, it is stated that this regulation was built to encourage employees to continue working after meeting retirement conditions. However, some inadequacies have arisen during the implementation process.
According to the drafting agency, many cases have met the conditions for early retirement due to having enough time to work in heavy, hazardous, dangerous professions, working in places with regional allowances from 0.7 or higher, areas with particularly difficult socio-economic conditions or with reduced working capacity but still continuing to work.
This causes the one-time allowance when retiring to increase due to the current calculation method. Notably, there are cases where employees only work for one more month after meeting the conditions to receive a pension and have already enjoyed the beneficial difference.
The Ministry of Home Affairs assesses that this regulation may create a form of profiteering from social insurance regimes, directly affecting the social insurance fund and not reflecting the correct policy of reducing the retirement age for special cases.
The report also cited a specific example, female workers retiring early due to reduced working capacity. This person pays social insurance for another month after meeting the conditions to receive a pension.
The additional amount contributed to the fund is nearly 4 million VND, but the one-time allowance increases by more than 7.1 million VND. In addition, employees can also receive an increased pension rate after only one month of work.
According to the Ministry of Home Affairs, it is necessary to study adjusting regulations to ensure objectivity in retirement conditions and limit redoubling twice when calculating the benefit level.
From analyzing the inadequacies in the Law on Social Insurance, the Ministry of Home Affairs chaired the drafting of a proposal to amend this regulation.
The draft amendment of Article 68 stipulates that the one-time allowance level is still equal to 0.5 times the average salary level used as the basis for social insurance contributions for each year of contribution exceeding the prescribed number of years.
For people who have met the conditions to receive pensions according to Article 64 or Article 65 but continue to pay social insurance, the allowance level equal to twice the average salary level used as the basis for social insurance contributions is only calculated for the contribution period after reaching retirement age according to the provisions of law to the time of retirement corresponding to the case of retirement according to Article 64 or Article 65.
The drafting agency said that the amendment aims to clearly define the time to calculate the benefit level. Accordingly, for people who are eligible for early retirement due to reduced working capacity but choose to continue working, the application of the allowance level of 0.5 times or 2 times will be based on the period from reaching retirement age according to the provisions of law to the corresponding retirement time. This regulation aims to ensure the correct nature of policies and limit the occurrence of differences that benefit workers.
