09 new points on compulsory social insurance applied from September 1, 2021 in Vietnam

09 new points on compulsory social insurance applied from September 1, 2021 in Vietnam (Illustration)

1. Additional subjects participating in compulsory social insurance (SI) in Vietnam

In Clause 1, Article 1 of Circular 06/2021/TT-BLDTBXH, the subjects are:

Part-time workers in communes, wards and towns who are also individuals concluding employment contracts under Point a and Point b Clause 1 Article 2 of Law on Social Insurance shall participate in compulsory social insurance under eligibility under Point a and Point b Clause 1 Article 2 of Law on Social Insurance.

Article 2. Subjects of application

1. Employees being Vietnamese citizens shall be covered by compulsory social insurance, including:

a/ Persons working under indefinite-term labor contracts, definite-term labor contracts, seasonal labor contracts or contracts for given jobs with a term of between full 3 months and under 12 months, including also labor contracts signed between employers and at-law representatives of persons aged under 15 years in accordance with the labor law;

b/ Persons working under labor contracts with a term of between full 1 month and under 3 months;

…

2. Maximum amount of sickness benefits for taking leave less than a month in Vietnam

Currently, point b, clause 2, Article 6 of Circular 59/2015/TT-BLDTBXH stipulates that the rate of entitlement to sickness benefits for the employees taking leave due to disease included in the List of diseases with required long-term treatment as stipulated in Clause 2, Article 26 of the Law on social insurance is calculated as follows:

From September 1, 2021,  A month of sick leave is calculated from the initial date of sick leave to its preceding date in the following month. In case of incomplete months of sick leave, sickness benefits of the remaining days of sick leave months shall be calculated using the following formula but not exceeding the sickness benefits of one month.

Thus, according to the new regulations, the sickness benefit entitlement for the month with odd days off is no longer calculated according to the actual number of days off to enjoy the sickness regime but calculated up to the maximum one-month sickness allowance of the employee.

3. Changing the basis for calculating the sickness benefit rate in Vietnam

Currently, where the employees suffer from disease or accident which is not work accident or take leave to enjoy the benefits upon their child’s sickness right in the first month of participation in compulsory social insurance and the time of leave is from 14 working days or more in a month, the rate of entitlement to sickness benefits is calculated on the monthly salary as a basis for social insurance payment of such month. (Clause 3, Article 6 of Circular 59).

However, from September 1, 2021, the sickness benefit rate in the above case is calculated based on salaries contributed to social insurance of the month preceding the month of leave. In case workers remain sick and must take leave in subsequent months, sick benefits shall be calculated based on salaries serving as the basis for social insurance of the month preceding the month of leave. (Clause 3, Article 1 of Circular 06).

4. More cases of male employees entitled to a lump-sum allowance when their wives give birth to children

Clause 5, Article 1 of Circular 06 has supplemented that In case the mother participates in social insurance but is ineligible for postpartum benefits while the father has already participated in social insurance for more than 6 months before the period of 12 months before delivery, the father shall receive lump-sum payment when delivery according to Article 38 of Law on Social Insurance.

Thus, Circular 06 has added cases where the father is eligible to receive a one-time maternity allowance when the wife gives birth to a child.

5. Change in maternity benefits when giving birth to twins or more in Vietnam

According to Clause 3, Article 10 of the current Circular 59, where the female employees have pregnancy of twin or more and when giving a birth, a baby is dead, the mother shall enjoy the maternity benefits for the live baby.

However, according to the new regulations, from September 1, 2021,  In case of female workers expecting a twins who decease upon birth or suffer from stillbirth, time of receiving postpartum benefits and lump-sum payment upon delivery shall be calculated based on total number of children. (Clause 6, Article 1 of Circular 06).

6. New regulations on annual leave to coincide with maternity leave in Vietnam

According to Clause 7, Article 1 of Circular 06, wWhen calculating period of maternity benefits  for cases where workers are taking annual leave or permitted leave or unpaid leave according to labor laws, the period that overlaps with annual leave, permitted leave and unpaid leave shall not be eligible for receiving benefits

This is a completely new regulation compared to the current regulations of Circular 59.

7. Conditions for convalescence and health rehabilitation benefits in Vietnam

According to Clause 1, Article 41 of the Law on Social Insurance, female employees whose health has not yet recovered within the first 30 working days after the maternity leave period are entitled to a leave for convalescence and health rehabilitation of between 5 and 10 days

The period of "first 30 working days" now guided in Clause 8, Article 1 of Circular 06/2021 refers to 30 working days following the period of maternity benefits where workers’ health has not fully recovered (Currently, Circular 59 does not provide specific guidance on this condition).

In addition, Circular 06 also stipulates: Female workers who work before maternity leave expires shall no longer eligible for postpartum rest and recovery benefits.

8. Additional conditions for pension benefits for soldiers subject to cashiering of military titles

In Clause 13, Article 1 of Circular 06, employees are Vietnamese citizens who are officers and professional military personnel; officers, professional non-commissioned officers, and officers and technical non-commissioned officers of the People's Police; people doing cipher work receive salaries like military personnel; non-commissioned officers and soldiers of the People's Army; non-commissioned officers and soldiers of the People's Public Security Forces serving a definite term; If military, police, or cipher students are studying and are entitled to living expenses, and if they are subject to cashiering of military titles or the people’s public security titles, the conditions for pension enjoyment will apply to those for ordinary employees.

Meanwhile, if they are not subject to cashiering of military titles or the people’s public security titles, the above people will be retired 5 years earlier than ordinary employees with the same conditions.

This is a new regulation which removes obstacles in the process of applying the law on social insurance to cases where soldiers are subject to cashiering of military titles or the people’s public security titles

9. Additional regulations related to death benefit in Vietnam

In Clause 23, Article 1 of Circular 06, the Ministry of Labor, War Invalids and Social Affairs of Vietnam stipulates Time for considering age for relatives of workers shall be the last day of the month in which workers decease.

When processing death benefits, if documents of relatives of workers cannot identify date of birth, use January 1 of the year of birth to calculate age.

In addition, Circular 06 also adds regulations on relatives having the right to choose to enjoy the lump-sum death benefit; stipulates the death benefit for people participating in social insurance or reserving the period of payment of social insurance premiums and who are receiving monthly labor accident and occupational disease allowance (Clause 24, 25, Article 1 of Circular 06/2021/TT-BLDTBXH).

Bao Ngoc

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