Adjustment of retirement pension benefits and social insurance allowance in line with salary reform

Salay reform

Pursuant to the Resolution 104/2023/QH15 on National budget estimation for 2024 approved by the National Assembly, the comprehensive salary policy reform will take effect from 1/7/2024 as stipulated in the Resolution No 27-NQ/TW dated 21/5/2018 at The seventh plenary session of the 12th Central Committee of the Communist Party of Viet Nam. At the same time, adjustment of retirement pension benefits, social insurance allowance, preferential regimes for people with meritorious services to the revolution and some social security policy attaching to basic salary.

Adjustment on minimum retirement pension calculation

As estimated by VSS, in the next 5 years, if retirement pension benefits, allowance are calculated based on the average social insurance contribution of the whole participation period, the amount of retirement pension will increase about 5% not including escalation of prices. Retirement pension amount of people retiring after 1/7/2024 will also increase 0,13% in comparison to that of people retiring before 1/7/2024.

According to VSS,  the 8% adjustment of retirement pension from 1/7/2024 is appropriate and based on the CPI of 3,35% and the GDP of 5,05% for 2023. The adjustment will also reduce the benefit amount  difference between people retiring before and after salary reform on 1/7/2024.

Social insurance, monthly allowance adjustment

As stipulated in 2014 Social Insurance Law, social insurance allowances are calculated based on basic salary. When salary reform is implemented, there will be no salary rate and basic salary, therefore social insurance allowance will also be changed. The Government will regulate specific amounts for allowances to ensure worker ‘ rights.

Changing of health insurance contribution rates

Health insurance contribution rate for households will be updated: the first family member will pay 4,5% of the basic salary, next family members will pay reducing rates: the second family member will pay 70%. The third family member, will pay 60%, the fourth family member will pay 50% of contribution rate of the first family member. From the fifth family member, contribution rate will reduce to 40%. For students and pupils, monthly contribution rate is 4,5% of basic salary, the State support to pay 40% of the amount.

However, from 1/7/2024, salary system will be reformed with no basic salary. Regulations and guidance on health insurance contribution and payment for households, pupils and students should be reviewed and renewed.