More than 16,200 billion VND to increase pensions and allowances from July 1

The Ministry of Labor, War Invalids and Social Affairs has just submitted to the Government a proposal to adjust pensions, social insurance benefits and monthly allowances, implemented at the same time as the basic salary increases from 1.8 to 2.34 million VND. This agency proposed a general increase rate of 15% above the current level in June 2024.

According to the Ministry of Labor, War Invalids and Social Affairs, the 15% increase is based on Resolution 104 dated November 2023 of the National Assembly on this year's state budget estimate, adjusting pensions, allowances, and social security policies associated with the basic salary; consistent with the CPI index as well as balancing the budget and Social Insurance Fund.

The total budget for increasing pensions, social insurance benefits and monthly allowances in the second half of the year is expected to be over VND16,200 billion, of which the state budget will spend VND3,760 billion for over 1.3 million people; the Social Insurance Fund will ensure over VND12,500 billion for 2.36 million people.

The decree adjusting pensions will take effect 45 days after its signing to ensure the rights of beneficiaries, but the regulations will be implemented from July 1.

This regulation is likely to cause problems in pension payments, such as the 2023 adjustment period. The Decree was implemented from July 1, but it will not take effect until August 14, waiting for further guidance, causing pensioners and social insurance beneficiaries to not receive the increase. People continuously ask questions to local social insurance agencies.

Vietnam Social Security then had to issue a notice to pay at the old rate in July-August and pay back the increased amount in September. Deputy Prime Minister Tran Hong Ha then had to request to pay the new pension in August.

At the same time, July 1, preferential allowances for people with meritorious services increased by 35.7% from 2.055 million to 2.789 million VND per month. Social assistance standards increased by 38.9% from 360,000 to 500,000 VND per month.

In the draft proposal to raise the social assistance level sent to the Government, the Ministry of Labor, War Invalids and Social Affairs assessed that the current standard of 360,000 VND per month is very low compared to the minimum living standard of the people, only 24% of the rural poverty line for the period 2021-2025, currently 1.5 million VND.

While the basic salary will increase by 30% in the near future, the preferential allowance for people with meritorious services will also increase by 26.5%. In the period 2021-2024, the preferential allowance for people with meritorious services will increase by over 62%; the basic salary will increase by 50.8%; CPI is expected to increase by 14%. Therefore, it is necessary to increase the social assistance allowance to ensure the livelihood of beneficiaries. The budget is expected to pay more than VND 4,700 billion in the last 6 months of the year for nearly 3.4 million people receiving social protection and 349,000 people receiving care funding.

Currently, the whole country has 3.66 million people receiving pensions, social insurance benefits, and monthly allowances. The average pension from the Social Insurance Fund is 5.6 million VND, from the state budget is 4.7 million VND per person per month.

The state budget spends more than VND27,000 billion each year to support and issue health insurance cards to 3.56 million social protection recipients. Of these, 1.6 million elderly people receive benefits; 1.6 million people receive disability benefits; 21,000 children lose their source of support; 146,000 children under 3 years old; 84,000 single people raising children under 16 years old and more than 349,000 households are caring for groups in need of assistance.