Retirees before 1995 will receive budget support for salary increase from July 1

The Ministry of Labor, War Invalids and Social Affairs (MOLISA) has just submitted a document and Decree adjusting pensions, social insurance benefits and monthly allowances to the Government.

Notably, there are about 300,000 people receiving pensions and monthly allowances before January 1, 1995 who are subject to adjustment paid by the State Budget, with an adjustment cost of about 285 billion VND.

Specifically, regarding beneficiaries of pensions, social insurance benefits, and monthly benefits with low benefits, those who retired and received pensions, social insurance benefits, and monthly benefits before January 1, 1995, after being adjusted to the general level, but whose benefits are lower than VND 3,500,000/person/month, will continue to be adjusted to increase according to the specific amount.

According to the representative of the Ministry of Labor, Invalids and Social Affairs, from the practical implementation of social insurance policies for those receiving pensions and monthly allowances before January 1, 1995, the pension and monthly allowance levels were determined based on the actual working time and the monthly salary before the employee retired. However, due to the characteristics of the salary policy before 1995, along with the provisions of the law on social insurance at that time, most employees retired or retired due to loss of working capacity with a short working time and low salary before retirement, thereby affecting the general level of pension and monthly allowance levels of this group of subjects.

In addition, some groups of subjects who have stopped receiving benefits according to regulations were later allowed by the State to continue receiving monthly benefits from the State budget, so the benefit level is quite low compared to the general level (the monthly social insurance benefit level of people receiving benefits according to Decision No. 91/2000/QD-TTg and Decision No. 613/QD-TTg is about 1.9 million VND/person/month).

Pursuant to Resolution No. 28-NQ/TW, the Ministry of Labor, Invalids and Social Affairs proposed adjustments for retirees who retired before January 1, 1995 and received less than VND 3.5 million/person/month. The Ministry of Labor, Invalids and Social Affairs explained that the determination of the threshold of VND 3.5 million/person/month as the basis for adjustment was calculated based on the level of VND 3 million/person/month stipulated in Decree No. 42/2023/ND-CP and made an increase of 15%. Regarding the determination of the adjustment threshold of VND 3.5 million/person/month, it was reported to the Government when developing the plan and timing of adjusting salaries, pensions, social insurance benefits and preferential benefits for people with meritorious services in 2024.

Specifically, those who received pensions, disability benefits and monthly allowances before January 1, 1995, after being adjusted to increase by 15% according to the general adjustment level, but whose benefit level is lower than VND 3,500,000/month, will have their benefit level adjusted to increase by VND 300,000/person/month for those whose benefit level is from VND 3,200,000/month or less; and increase by VND 3,500,000/person/month for those whose benefit level is from VND 3,200,000/month to less than VND 3,500,000/month.

With the above adjustment, it is expected that about 300,000 people receiving pensions and monthly allowances before January 1, 1995 will be subject to adjustment paid by the state budget, with an adjustment cost of about 285 billion VND.

It is expected that the total budget for increasing pensions, social insurance benefits and monthly allowances in the second half of 2024 will be more than 16,200 billion VND, of which the state budget will spend 3,760 billion VND for more than 1.3 million people; the Social Insurance Fund will guarantee more than 12,500 billion VND for 2.36 million people.

Notably, if the Decree is approved, it will take effect 45 days after the date of signing, which means that the Decree will not take effect until mid-August. Meanwhile, to ensure the rights of the subjects regulated, the provisions of the Decree will be implemented from July 1, 20242024 and Decree No. 42/2023/ND-CP will expire from the date this Decree takes effect. Therefore, it will be necessary to pay back the same amount as when the pension was increased at the same time in 2023.