Does the Basic Salary Increase Affect the One-time Social Insurance Benefit for Employees?

Does an increase in the statutory pay rate affect the one-time social insurance benefit for workers?

Pursuant to Clause 2, Article 60 of the 2014 Law on Social Insurance, the provisions on one-time social insurance are as follows:

One-time Social Insurance Benefit

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2. The one-time social insurance benefit is calculated based on the number of years participating in social insurance, with each year calculated as follows:

a) 1.5 months of the average monthly salary for social insurance contributions for the years of contribution before 2014;

b) 02 months of the average monthly salary for social insurance contributions for the years of contribution from 2014 onwards;

c) If the period of participation in social insurance is less than one year, the one-time social insurance benefit is equal to the amount contributed, with a maximum of 02 months of the average monthly salary for social insurance contributions.

As per the above regulations, the one-time social insurance benefit is calculated based on the number of years of participation in social insurance, and it is calculated as follows:

- For the years of social insurance contributions before 2014, it is equal to 1.5 months of the average monthly salary for social insurance contributions;- For the years of social insurance contributions from 2014 onwards, it is equal to 02 months of the average monthly salary for social insurance contributions.

If the period of participation in social insurance is less than one year, the one-time social insurance benefit is equal to the amount contributed, with a maximum of 02 months of the average monthly salary for social insurance contributions.

Therefore, the amount of the one-time social insurance benefit depends on the average monthly salary for social insurance contributions, and there is no fixed amount.

It is clear that the average monthly salary for social insurance contributions is the direct factor affecting the one-time social insurance benefit.

Recently, the Government of Vietnam issued two new decrees: Decree 73/2024/ND-CP and Decree 74/2024/ND-CP on increasing the statutory pay rate and regional minimum wages.

With the increase in the statutory pay rate and regional minimum wages, there will be adjustments in wage policies for employees who follow wage policies set by the State and those who follow wage policies decided by employers.

Therefore, if employees receive a salary increase according to new wage policies, it may lead to an increase in the monthly salary for social insurance contributions from July 1, 2024, onwards, thereby increasing the average monthly salary for social insurance contributions from that point forward.

Thus, although increasing the statutory pay rate and regional minimum wages will not directly affect one-time social insurance benefits, it is evident that these changes will increase the average monthly salary for social insurance contributions from July 1, 2024, onwards, leading to an increase in the one-time social insurance benefit for these individuals.

Does an increase in the statutory pay rate affect the one-time social insurance benefit for workers? (Image from Internet)

What documents are needed for a one-time social insurance withdrawal?

According to Article 109 of the 2014 Law on Social Insurance, the one-time social insurance withdrawal dossier includes the following documents:

[1] Social Insurance Book.

[2] Application for one-time social insurance benefit.

[3] For individuals going abroad to reside, a copy of the confirmation from the competent authority regarding the renouncement of Vietnamese nationality or a certified or notarized Vietnamese translation of one of the following documents:

- Passport issued by a foreign country.- Visa issued by the competent foreign authority confirming permission to enter for the purpose of residing abroad.- Documents confirming the process of applying for foreign citizenship; documents confirming or permanent residence card, residence permit for a period of 5 years or more issued by the competent foreign authority.

[4] Extracted medical records for individuals applying for one-time social insurance due to having life-threatening diseases such as cancer, poliomyelitis, cirrhosis, leprosy, severe tuberculosis, HIV transitioning to AIDS, and other diseases as prescribed by the Ministry of Health.

*For individuals receiving monthly retirement pensions or social insurance benefits going abroad to settle, the one-time social insurance withdrawal dossier is similar to items [2] and [3].

What is the processing time for a one-time social insurance withdrawal?

According to Clause 3, Article 110 of the 2014 Law on Social Insurance:

Processing retirement pensions, one-time social insurance benefits

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3. Within 30 days from the time an employee becomes eligible and submits a request for a one-time social insurance benefit, as stipulated in Article 109 of this Law, to the social insurance agency.

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Thus, the processing time for a one-time social insurance withdrawal is within 30 days from the time the employee becomes eligible and submits the request for a one-time social insurance benefit to the social insurance agency.