Currently, many employees have the need to receive a lump-sum social insurance allowance instead of waiting for retirement age to receive monthly insurance. Here are 5 important things to know to enjoy lump-sum social insurance allowance as prescribed by Vietnam’s law.
Article table of contents
1. Conditions for lump-sum social insurance allowance
According to Clause 1 Article 60 of the Law on Social Insurance 2014 of Vietnam, being Vietnamese citizens covered by compulsory social insurance are entitled to a lump-sum social insurance allowance upon their request when falling in one of the following cases:
- They have reached the retirement age but have paid social insurance premiums for under full 20 years;
- Female employees who are full-time or part-time staffs in communes, wards or townships, and cease working after having paid social insurance premiums for between full 15 years and under 20 years, and are full 55 years old, are entitled to pension;
- They settle abroad;
- They get a fatal disease, such as cancer, poliomyelitis, dropsy cirrhosis, leprosy, serious tuberculosis, or HIV infection progressing into AIDS, or other diseases as prescribed by the Ministry of Health;
- Officers and professional army men of the people's army; officers and professional non-commissioned officers and officers and technical non- commissioned officers of the people's public security; and persons engaged in cipher work and enjoying salaries like army men; non-commissioned officers and soldiers of the people’s army; non- commissioned officers and soldiers on definite-term service in the people’s public security; army, public security and cipher cadets who are entitled to cost- of-living allowance demobilized or cease working without being eligible for pension.
Moreover, according to Article 1 of the Resolution No. 93/2015/QH13 of the National Assembly of Vietnam on the implementation of the policy on lump-sum payment of social insurance benefits to employees, one year after leaving their jobs, for employees participating in compulsory social insurance, or after stopping to make social insurance contributions, for persons participating in voluntary social insurance, employees participating in compulsory social insurance and persons participating in voluntary social insurance whose social insurance payment period is less than 20 years will be entitled to receive lump-sum social insurance benefits if they so request.
2. Application for lump-sum social insurance allowance
According to Article 109 of the Law on Social Insurance 2014 of Vietnam, application for lump-sum social insurance allowance includes:
- The social insurance book.
- The employee’s application for enjoyment of lump-sum social insurance allowance.
- For persons who settle abroad, a copy of the competent agency’s written certification of renunciation of Vietnamese nationality, or a certified or notarized Vietnamese translation of one of the following papers:
+ Passport issued by a foreign country;
+ Visa issued by a competent foreign agency, certifying such country’s permission for entry for overseas residence;
+ Paper certifying such person is carrying out procedures for naturalization in a foreign country; paper certifying residence or permanent residence card or residence card of a term of 5 years or more, issued by a competent foreign agency.
- For an employee suffering from one of the life-threatening diseases, the extract of the medical record is required.
3. Settlement of lump-sum social insurance allowance
According to Article 110 of the Law on Social Insurance 2014 of Vietnam, within 10 days after receiving a complete and valid dossier, for persons to enjoy a lump-sum social insurance allowance, the social insurance agency shall settle the enjoyment of pension or lump-sum allowance and make payment to employees.
4. Where to apply for lump-sum social insurance allowance
According to Clause 2 Article 2 of the Decision No. 166/QĐ-BHXH of Vietnam Social Security, applicant for lump-sum social insurance allowance shall submit application at:
- District social security office where the applicant resides;
- Provincial social security office (authority to process applications for social insurance benefits) where the applicant resides.
5. Calculation of lump-sum social insurance allowance
According to Clause 2 Article 60 of the Law on Social Insurance 2014 of Vietnam, Article 19 of the Circular No. 59/2015/TT-BLĐTBXH, the lump-sum social insurance allowance shall be calculated based on the number of years of social insurance premium payment; for each year of payment it must equal:
- 1.5 times the average monthly salary on which social insurance premiums are based, for the years of payment prior to 2014;
- 2 times the average monthly salary on which social insurance premiums are based for the years of payment since 2014;
- For a period of social insurance premium payment of under 1 year, the social insurance allowance must equal the paid premium amount but not exceed 2 times the average monthly salary on which social insurance premiums are based.
- 22% of the rates of monthly salary of social insurance payment, the maximum rate is equal to 02 months of the average monthly salary of social insurance payment if the time of social insurance payment is under 01 year.
Note, the rate of entitlement to lump-sum social insurance allowance excludes the amount of money financed by the State to pay the voluntary social insurance, except for the case that the employee is suffering from one of the life-threatening diseases.
Specifically, the rate of entitlement to lump-sum social insurance allowance is calculated as follows:
In which:
- Time participating in social insurance
+ When calculating the rate of entitlement to one-time social insurance in case the time of social insurance payment has the odd months, then from 01 to 06 months is calculated as a half year; from 07 to 11 months is calculated as 01 year.
+ In case of calculation before January 01, 2014, if the time of social insurance payment has the odd months, such odd months shall be transferred to stage of social insurance payment from January 01, 2014 onwards as a basis for calculation of one-time social insurance.
- Average monthly salary paid for social insurance:
It should be noted that the annual indexation rate specified in Circular No. 35/2019/TT-BLĐTBXH, indexation of monthly salaries after payment of social insurance contributions is as follows:
- Indexation rate for subjects participating in compulsory social insurance:
- Indexation rate for subjects participating in voluntary social insurance:
Example:
Mr. M 40 years old having the time to participate in social insurance from October 2017 to April 2019 as follows:
October 2017 - December 2017: Salary VND 4.000.000/month.
January 2018 - March 2019: Salary 4.500.000/month.
April 2019: Salary 6.000.000/month.
Mr. M has participated in social insurance for 1 year and 6 months, is not old enough to enjoy pension and wishes to receive a lump-sum social insurance allowance. Eligibility period to apply for one-time social insurance benefits from March 2020.
Thus, lump-sum social insurance allowance is calculated as follows:
- Ms. A's time to participate in social insurance after January 1, 2014 and has a period of social insurance payment is 1 year and 6 months (1,5 years).
- Average monthly salary:
= 4.642.778 (VND/month)
Therefore, the lump-sum social insurance allowance is: 4.642.778 * 2 * 1.5 = 13.928.334 VND.
Le Vy
- Key word:
- Law on Social Insurance 2014
- social insurance
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