Increase in Net Pension for August 2023: Accurate? Formula for Calculating New Pension Amount Effective from August 2023?
Is it accurate that the actual pension amount received in August 2023 will increase?
On July 20, 2023, Vietnam Social Security issued Official Dispatch 2206/BHXH-TCKT in 2023 regarding the payment of pensions, social insurance benefits, and monthly allowances for the payment period of August 2023.
The Social Security will organize the payment of pensions, social insurance benefits, and monthly allowances for August 2023 and the payment of the additional difference amount of July 2023 according to the new benefit levels stipulated in Decree 42/2023/ND-CP, Circular 06/2023/TT-BLDTBXH from August 14, 2023.
Thus, during the payment period of August 2023, pension recipients and social insurance benefit recipients will receive the pension and benefits for August along with the additional amount for July that was not received during the July payment period.
To be specific, the pension for August 2023 is calculated as follows:
Pension received in August 2023 = August pension + the unpaid difference for July 2023
Where the unpaid difference for July 2023 = New pension amount - Actual pension amount received in July 2023.
Example 1: Mr. A has a pension of VND 4,000,000 for June 2023. Mr. A is eligible for a 12.5% pension increase.
August 2023 pension = VND 4,000,000 x 1.125 = VND 4,500,000
Additional amount for July not yet received = VND 4,500,000 - VND 4,000,000 = VND 500,000
August 2023 pension received = VND 4,500,000 + VND 500,000 = VND 5,000,000
See the full Official Dispatch 2206/BHXH-TCKT in 2023 here.
Is it accurate that the actual pension amount received in August 2023 will increase? Formula for calculating the new pension amount from August 2023
Formula for calculating the new pension amount from August 2023?
Based on Article 2 Circular 06/2023/TT-BLDTBXH, the new pension amount to be paid by the social insurance agency from the payment period of August 2023 is determined by the following formula:
- Persons receiving pensions before July 1, 2023, and who have been increased by 7.4% from January 1, 2022, will be increased by 12.5% of the June 2023 benefit level.
The pension determination formula is:
New pension amount = June 2023 pension amount x 1.125
- Persons receiving pensions before July 1, 2023, but whose benefits have not been increased by 7.4% from January 1, 2022, will be increased by 20.8% of the June 2023 benefit level.
The pension determination formula is:
New pension amount = June 2023 pension amount x 1.208
- Persons who received pensions before 1995, after being increased by 12.5% or 20.8%, and whose benefit levels are still below VND 3 million/month, will receive an additional fixed amount:
+ Persons with pensions below VND 2.7 million/month:
New pension amount = June pension amount after an increase of 12.5% or 20.8% + VND 300,000/month
+ Persons with pensions from VND 2.7 to less than VND 3 million/month:
New pension amount = VND 3 million/month
Who is eligible for the pension increase from July 1, 2023?
The subjects eligible for the pension, social insurance benefit increase from July 1, 2023, are stipulated in Article 1 Decree 42/2023/ND-CP which include:
(1) Cadres, officials, workers, public employees, and laborers (including those who have participated in voluntary social insurance, retirees from the Nghe An Farmer's Social Insurance Fund transferred according to Decision 41/2009/QD-TTg of the Prime Minister of Vietnam on the transfer of Nghe An Farmers’ Social Insurance to voluntary social insurance); soldiers, people's police, and cipher personnel receiving monthly pension.
(2) Commune-level officials defined in Decree 92/2009/ND-CP dated October 22, 2009, of the Government of Vietnam on titles, number, and policies for commune-level officials, non-specialized semi-officials at the commune level, Decree 34/2019/ND-CP of the Government of Vietnam amending and supplementing some provisions about commune-level officials and non-specialized semi-officials at commune level, in hamlets, residential groups, Decree 121/2003/ND-CP in 2003 of the Government of Vietnam on policies for commune-level officials, and Decree 09/1998/ND-CP of the Government of Vietnam amending and supplementing Decree 50/CP in 1995 of the Government of Vietnam on policies for commune-level officials on living expenses, currently receiving monthly pensions and allowances.
(3) Persons receiving monthly labor loss allowance according to the law's regulations; persons receiving monthly allowances according to Decision 91/2000/QD-TTg of the Prime Minister of Vietnam on allowances for those who have reached the retirement age at the time of stoppage of monthly labor loss allowance, Decision No. 613/QD-TTg in 2010 of the Prime Minister of Vietnam on monthly allowances for those who have from 15 years to under 20 years of actual working time and have finished enjoying labor loss allowance; rubber workers receiving monthly allowances according to Decision No. 206-CP in 1979 of the Council of the Government of Vietnam on policies for newly liberated heavy manual workers, harmful to health, now old and weak having to quit.
(4) Commune-level officials currently receiving monthly allowances according to Decision No. 130-CP in 1975 of the Council of the Government of Vietnam supplementing policies, policies for commune officials and Decision No. 111-HDBT dated October 13, 1981, of the Council of Ministers amending and supplementing some policies for commune officials and policies.
(5) Soldiers receiving monthly allowances according to Decision 142/2008/QD-TTg of the Prime Minister of Vietnam on implementing policies for soldiers participating in the resistance war against the US with less than 20 years of service in the army who have been demobilized and returned to their localities (amended and supplemented by Decision 38/2010/QD-TTg of the Prime Minister of Vietnam).
(6) People's police receiving monthly allowances according to Decision 53/2010/QD-TTg of the Prime Minister of Vietnam stipulating policies for officers, people's police soldiers who participated in the resistance war against the US with less than 20 years of service who have been demobilized and returned to their localities.
(7) Soldiers, people's police, and cipher personnel who have salaries equal to soldiers and people's police officers, and are receiving monthly allowances according to Decision 62/2011/QD-TTg of the Prime Minister of Vietnam on policies for those who participated in the war for protecting the Fatherland, carried out international duties in Cambodia, helped Laos after April 30, 1975, and have been demobilized, retired, or resigned.
(8) Persons receiving monthly labor accident and occupational disease allowances.
(9) Persons receiving monthly survivorship allowances before January 1, 1995.
The subjects stipulated in points a, b, c, d, dd, e, and g of clause 1 Article 1 Decree 42/2023/ND-CP who retired, received social insurance benefits, or monthly allowances before January 1, 1995, after adjusting according to clause 1 Article 2 of Decree 42/2023/ND-CP will have pensions, social insurance benefits, and monthly allowances under VND 3,000,000/month.
Note: Decree 42/2023/ND-CP takes effect from August 14, 2023. However, the policies in this Decree apply from July 1, 2023.
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