On August 24, 2017, the Social Insurance (SI) of Vietnam issued Official Dispatch 3758/BHXH-TT regarding the implementation of communication on Social Insurance policies. The document notably highlights the advantages of receiving a pension compared to obtaining a one-time Social Insurance payment, such as:
Article table of contents
Receiving One-time Social Insurance (SI) Payment Means Workers Lose the Opportunity to Receive a Pension
The amount contributed to the Social Insurance Fund is a precious savings of one's own. It does not disappear; on the contrary, it is managed and invested in growth by the Social Insurance agency. Workers (employees) can entirely preserve the time of SI contribution so that when conditions allow, they can continue mandatory SI participation or voluntarily participate with partial financial support from the State (at 10%, 25%, or 30% of the contribution rate calculated on the rural poverty line standard depending on the object). Therefore, during the preservation period, if unfortunately deceased:
- The family will receive a funeral allowance equivalent to 10 months of basic salary;- Dependents, depending on the conditions, will receive a monthly survivorship allowance (maximum 4 people) until maturity (if they are children) or receive it until death (if they are spouses, parents who are beyond working age and have no income or have income but lower than the statutory pay rate);- In case of receiving a one-time survivorship allowance, the allowance level is calculated similarly to a one-time SI payment.
Receiving a One-time SI Payment Faces Many Losses
- Workers lose 0.64 months' salary and the SI fund benefits: With a 22% monthly salary contribution to the retirement and survivorship fund, the total annual contribution is equivalent to 2.64 months' salary; whereas the one-time SI payment for each year of contribution is only equivalent to 2 months' salary. Thus, clearly, employees lose 0.64 months' salary.- Suffer losses in accumulating time for pension benefits: Pensioners, besides the pension, have the fund pay entirely for the purchase of health insurance cards (equivalent to 4.5% of the pension); and periodically, based on the consumer price index (inflation), the state adjusts the pension increase accordingly. When deceased, the family still receives a funeral allowance equivalent to 10 months' statutory pay rate, dependents receive monthly survivorship allowance if qualified or receive a one-time survivorship allowance at the lowest level equivalent to 3 months’ pension.
Example:
- Each year of SI contribution before 2014 is calculated at 1.5 months of average salary. From January 2008 to December 2012: 6 years x 1.5 months = 9 months.- Each year of SI contribution from 2014 onwards is calculated at 2 months of average salary. From January 2014 to December 2027: 14 years x 2 months = 28 months.- The total number of months received is: 9 months + 28 months = 37 months.
=> Total one-time SI payment: 7,137,500 VND x 37 months = 264,087,500 VND
* Total benefits when receiving a pension (including the amount for buying a health insurance card, funeral allowance, one-time survivorship allowance at the lowest level of 3 months' pension):
- For female workers it is 2,161,050,000 VND, which is 1,896,962,000 VND more than the one-time SI payment (7.18 times more).- For male workers it is 1,786,019,000 VND, which is 1,521,931,000 VND more than the one-time SI payment (5.76 times more).
Thus, according to the disseminated contents in Official Dispatch 3758/BHXH-TT, compared to receiving a pension, receiving a one-time SI payment causes great disadvantages to the workers themselves.
Video documenting the summary of the document
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