Salaries and allowances of officials and public employees from July 1, 2020? This is a question that Thu Ky Luat has recently received quite frequently from our Customers and Members, especially as the anticipated statutory pay rate increase is approaching. The editorial board of Thu Ky Luat would like to address this issue in the following article.
Article table of contents
Salaries and allowances for officials and public employees from July 1, 2020: Illustrative image
According to the content of Resolution 86/2019/QH14 passed by the 14th National Assembly, 8th session on November 12, 2019, the National Assembly mandates the Government of Vietnam to adjust the statutory pay rate from VND 1.49 million/month to VND 1.6 million/month. Concurrently, it will adjust pensions, social insurance allowances, monthly allowances as prescribed (for beneficiaries ensured by the state budget), and preferential allowances for those who have rendered services to the revolution, equivalent to the statutory pay rate from July 1, 2020.
Thus, according to the spirit of Resolution 86, from July 1, 2020, the projected statutory pay rate for officials and public employees will be VND 1.6 million/month (an increase of VND 110,000/month compared to the current rate). This increase in the statutory pay rate will result in notable increases in the salaries and various allowances of officials and public employees.
However, due to the impact of the COVID-19 pandemic, at the opening session of the 9th meeting on the morning of May 20, 2020, the Prime Minister of the Government of Vietnam proposed that the National Assembly consider not increasing the statutory pay rate and pensions for officials, armed forces from July 1, 2020.
And in Conclusion 77-KL/TW on the policy of overcoming the impact of the COVID-19 pandemic to recover and develop the national economy issued on June 5, 2020, the Politburo emphasized: “At present, do not implement the adjustment of statutory pay rate for officials and public employees, armed forces, and pensions from July 1, 2020.”
Therefore, according to the content of Conclusion 77, upcoming adjustments to increase the statutory pay rate for officials and public employees and armed forces to VND 1,600,000/month as projected in Resolution 86/2019/QH14 will not be implemented from July 1, 2020. The statutory pay rate from July 1, 2020, for officials and public employees and armed forces (military, police, cryptography) will still be maintained at VND 1,490,000/month as at present. With this maintenance of the statutory pay rate, the salaries and various allowances, and subsidies of officials and public employees from July 1, 2020, will be calculated as follows:
1. Actual salary, allowances of officials remain unchanged
With the maintenance of the statutory pay rate at VND 1,490,000/month from July 1, 2020, the salaries and various allowances of officials and public employees will remain consistent with the current rates. To be specific:
- For salaries:
Salary of officials = Statutory pay rate x Current salary coefficient.
From July 1, 2020, the monthly salary of officials will also = VND 1,490,000/month x Current salary coefficient.
- For allowances calculated based on the statutory pay rate:
Allowance = Statutory pay rate of VND 1,490,000/month x Current allowance coefficient
- For allowances calculated as a percentage of the current salary including the leadership position allowance and seniority allowance beyond the grade:
Allowance = (Salary from July 1, 2020, + Leadership position and seniority beyond the grade allowance from July 1, 2020) x Percentage of allowance according to the regulations
- For the retained differential allowance, calculated as follows:
Retained differential allowance amount = VND 1,490,000/month x Current retained differential coefficient
- Additionally, for members of the People's Council at various levels, the operational allowance will be calculated as follows:
Operational allowance = Statutory pay rate of VND 1,490,000 x Operational allowance coefficient according to the regulations
2. Maximum salary for officials and public employees remains at VND 11.92 million
Currently, according to the salary table in Decree 204/2004/ND-CP, the highest salary coefficient for officials and public employees of type A3, step 6, is 8.00. The actual salary will be VND 11.92 million/month, the maximum salary that officials and public employees can receive.
Meanwhile, the lowest salary for an official will be VND 2,011.5 million/month for type C officials in group 3 with a salary coefficient of 1.35.
3. Maximum salary subject to social insurance contributions remains at VND 29.8 million
According to Clauses 1, Article 85, and Clause 1, Article 89 of the Law on Social Insurance 2014 and Clause 1, Article 6 of Decision 595/QD-BHXH, the social insurance contribution amount for officials is:
Social insurance contribution = Monthly salary amount x 8% = (Salary + allowances calculated from statutory pay rate) x 8%
Furthermore, Article 89 of the Law on Social Insurance 2014 stipulates that if the salary exceeds 20 times the statutory pay rate, the monthly salary subject to social insurance contributions will be equivalent to 20 times the statutory pay rate.
Thus, the maximum salary subject to social insurance contributions from July 1, 2020, will still = VND 1,490,000 x 20 = VND 29.800.000.
4. Social insurance benefits remain unchanged
With the statutory pay rate remaining VND 1,490,000/month, from July 1, 2020, social insurance benefit amounts calculated based on the statutory pay rate will also remain the same as currently. For instance:
- One-time childbirth allowance = VND 1,490,000 x 2 = VND 2,980,000.
- Recuperation allowance after childbirth = VND 1,490,000 x 30% = VND 447,000/day.
- Funeral allowance = VND 1,490,000 x 10 = VND 14,900,000.
5. Minimum monthly pension is VND 1.49 million
According to Clause 5, Article 56 of the Law on Social Insurance 2014, the minimum monthly pension for employees participating in compulsory social insurance who are eligible for pension benefits will be equal to the statutory pay rate, except as specified in Point i, Clause 1, Article 2, and Clause 3, Article 54 of this Law.
Therefore, from July 1, 2020, with the statutory pay rate of VND 1,490,000/month as currently, the minimum monthly pension for employees will also remain VND 1,490,000.
6. Reward levels for Communist Party members also remain unchanged
According to Guideline 56-HD/VPTW, many reward levels for Communist Party members are based on the statutory pay rate.
Thus, with the statutory pay rate remaining at VND 1,490,000/month, reward levels from July 1, 2020, will also remain unchanged. For instance, the reward level associated with the Communist Party Badge from July 1, 2020, will be as follows:
- 30-year Communist Party Badge = 1.5 times the statutory pay rate amount = VND 1,490,000 x 1.5 = VND 2,235,000;
- 40-year Communist Party Badge = 2.0 times the statutory pay rate amount = VND 1,490,000 x 2 = VND 2,980,000;
- 50-year Communist Party Badge = 3.0 times the statutory pay rate amount = VND 1,490,000 x 3 = VND 5,700,000;
- 55-year Communist Party Badge = 3.5 times the statutory pay rate amount = VND 1,490,000 x 3.5 = VND 5,215,000;
- 60-year Communist Party Badge = 5.0 times the statutory pay rate amount = VND 1,490,000 x 5 = VND 7,450,000;
- 65-year Communist Party Badge = 6.0 times the statutory pay rate amount = VND 1,490,000 x 6 = VND 8,940,000;
- 70-year Communist Party Badge = 8.0 times the statutory pay rate amount = VND 1,490,000 x 8 = VND 11,920,000;
- 75-year Communist Party Badge = 10.0 times the statutory pay rate amount = VND 1,490,000 x 10 = VND 14,900,000;
- 80-year Communist Party Badge = 15.0 times the statutory pay rate amount = VND 1,490,000 x 15 = VND 22,350,000.
Nguyen Trinh
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