What are regulations on calculation of late payment interest on social insurance contributions and premiums in Vietnam?

According to the law in Vietnam, what is social insurance?

Pursuant to Article 3 of the Law on Social Insurance in 2014 stipulating as follows:

Interpretation of terms

In this Law, the terms below are construed as follows:

1. Social insurance means the guarantee to fully or partially offset an employee’s income that is reduced or lost due to his/her sickness, maternity, occupational accident, occupational disease, retirement or death, on the basis of his/her contributions to the social insurance fund.

2. Compulsory social insurance means a form of social insurance organized by the State in which employees and employers are required to participate.

3. Voluntary social insurance means a form of social insurance organized by the State in which a participant may select a premium rate and a method of premium payment suitable to his/her income and the State supports his/her payment of social insurance premiums for him/her to enjoy retirement and survivorship allowance benefits.

As regulations above, social insurance means the guarantee to fully or partially offset an employee’s income that is reduced or lost due to his/her sickness, maternity, occupational accident, occupational disease, retirement or death, on the basis of his/her contributions to the social insurance fund.

Pursuant to Article 4 of the Law on Social Insurance in 2014 stipulating social insurance benefits as follows:

- Compulsory social insurance covers the following benefits: Sickness; Maternity; Occupational accident and occupational disease; Retirement; Survivorship allowance.

- Voluntary social insurance covers the following benefits: Retirement; Survivorship allowance.

- The supplementary retirement scheme shall be stipulated by the Government.

What are regulations on calculation of late payment interest on social insurance contributions and premiums in Vietnam? - Source: Internet

What are rights of employees participating in social insurance in Vietnam?

Pursuant to Article 18 of the Law on Social Insurance in 2014 stipulating rights of employees as follows:

Rights of employees

1. To participate in social insurance and enjoy social insurance benefits in accordance with this Law.

2. To be granted and manage social insurance books.

3. To fully and promptly receive pensions and social insurance allowances in one of the following forms:

a/ Directly from social insurance agencies or service organizations authorized by social insurance agencies;

b/ Via their deposit accounts opened at banks;

c/ Through employers.

4. To enjoy health insurance in the following cases:

a/ Being on pension;

b/ Taking leave on maternity allowance for childbirth or child adoption;

c/ Taking leave on monthly occupational accident or occupational disease allowance;

d/ Being on sickness allowance, for employees who suffer a disease on the Ministry of Health-issued list of diseases requiring long-term treatment.

5. To take medical assessment of their working capacity decrease, if they fall in the case specified at Point b, Clause 1, Article 45 of this Law and have their period of social insurance premium payment reserved; not to pay medical assessment costs if they are eligible to social insurance.

6. To authorize others to receive pensions or social insurance allowances.

7. Every 6 months, to be provided by employers with information on the payment of social insurance premiums; every year, to have the payment of social insurance premiums certified by social insurance agencies; to request employers and social insurance agencies to provide information on the payment of social insurance premiums and enjoyment of social insurance.

8. To lodge complaints or denunciations or initiate lawsuits about social insurance in accordance with law.

As regulations above, employees participating in social insurance in Vietnam are entitled to following rights:

- To participate in social insurance and enjoy social insurance benefits in accordance with the Law on Social Insurance in 2014.

- To be granted and manage social insurance books.

- To fully and promptly receive pensions and social insurance allowances in one of the following forms: Directly from social insurance agencies or service organizations authorized by social insurance agencies; Via their deposit accounts opened at banks; Through employers.

- To enjoy health insurance in the following cases: Being on pension; Taking leave on maternity allowance for childbirth or child adoption; Taking leave on monthly occupational accident or occupational disease allowance; Being on sickness allowance, for employees who suffer a disease on the Ministry of Health-issued list of diseases requiring long-term treatment.

- To take medical assessment of their working capacity decrease; not to pay medical assessment costs if they are eligible to social insurance.

- To authorize others to receive pensions or social insurance allowances.

- To be provided by employers with information on the payment of social insurance premiums; to request employers and social insurance agencies to provide information on the payment of social insurance premiums and enjoyment of social insurance.

- To lodge complaints or denunciations or initiate lawsuits about social insurance in accordance with law.

What are regulations on calculation of late payment interest on social insurance contributions and premiums in Vietnam?

Pursuant to Article 37 of the Decision 595/QĐ-BHXH in 2017 (amended by Clause 6 Article 1 of the Decision 490/QĐ-BHXH in 2023) stipulating calculation of late payment interest on insurance contributions and premiums as follwos:

1. If an employer who pay contributions of compulsory social insurance or premiums of health insurance, unemployment insurance or occupational accident and occupational disease late compared with the prescribed time limit for 30 days or more, they shall pay the interest on unpaid insurance premiums.

2. Method for interest calculation: on the first day of month

3. The late payment interest on premiums compulsory of insurance shall be calculated as follows:

Lcdi = Pcdi x k (VND) (1)

Where:

* Lcdi: The late payment interest on compulsory social insurance contributions or premiums of health insurance, unemployment insurance or occupational accident and occupational disease insurance calculated in the month i (VND)

* Pcdi: Insurance premiums that are paid late and subject to interest in the month i and shall be calculated as follows:

Pcdi = Plki - Spsi (VND)              (2)

Where:

Plki: Total accumulated insurance contributions or premiums until the end of the month preceding the month i (excluding late-payment interest and unpaid interest in the previous periods (if any)).

Spsi: Amount of insurance contributions or premiums payable whose payment is not overdue and shall be specified as follows:

+ In case of monthly payment of insurance contributions or premiums: Spsi shall equal to the monthly contributions or premiums of the month preceding the month i;

+ In case of quarterly or biannual payment of insurance contributions or premiums: Spsi shall equal to the total monthly premiums payable of the months preceding the month i in which the contributions or premiums are not mature.

* k: rate of late payment interest at the time of interest calculation and shall be specified as follows:

- Regarding compulsory social insurance, unemployment insurance, occupational accident and occupational disease insurance, k shall be equal to 2 times the monthly average investment interest rate of social insurance fund of the preceding year announced by Vietnam Social Security.

- In case of health insurance, k shall be equal to 2 times the monthly interest rate of the interbank market with a term of 9 months announced by the State Bank of Vietnam on the Portal of the State Bank of Vietnam in the preceding year. If the interest rate of interbank market of the preceding year has it term other than 9 months, the interest rate of the term preceding the 9-month term shall be applied.

- The late payment interest on insurance contributions and premiums receivable in a month shall include the late payment interest accumulated to the end of the preceding month and the late payment interest on the insurance contributions or premiums that are paid late in this month.

- If an employer that is no longer located in the registered business place (missing employer) and has its insurance contributions and premiums payable and late payment interest calculated until the time of leaving its business place by the social insurance authority wishes to re-operate, apart from its unpaid premiums and late payment interest, the employer shall pay arising interest on unpaid insurance premiums calculated from the time when it suspends its transactions according to the certain interest rate of each period.

- Annually, within the first 15 days of January, the Vietnam Social Security shall notify the monthly average interest rate according to the average interest rate prescribed in Points a and b Clause 3 Article 6 of the Prime Minister’s decision No. 60/2015/QD-TTg dated November 27, 2015 on financial management in term of social insurance, health insurance and unemployment insurance and administrative expenses related to social insurance, health insurance and unemployment insurance to social insurance authorities of provinces, central-affiliated cities, Ministry of National Defense and Ministry of Public Security for implementation. 

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