Formula for calculating severance policy for officials during organizational apparatus in Vietnam

Formula for calculating severance policy for officials during organizational apparatus in Vietnam​ (Image from the internet)

The Minister of Home Affairs issues Circular 1/2025/TT-BNV on January 17, 2024, guiding the implementation of policies for officials and public employees and employees during the organization restructuring of the political system.

Formula for calculating severance policy for officials during organizational apparatus in Vietnam

Officials and commune-level officials as stipulated in Article 2 of this Circular, when permitted by the competent authority to resign, are entitled to either retain the period of social insurance contribution or receive a lump-sum social insurance benefit as regulated by the social insurance laws specified in Clause 3, Article 9 of Decree 178/2024/ND-CP; simultaneously, they are entitled to three types of allowances prescribed in Clauses 1, 2, and 4, Article 9 of Decree 178/2024/ND-CP as follows:

(1) Separation Allowance:

For those resigning within the first 12 months:

For those resigning from the 13th month onwards:

(2) An allowance of 1.5 months of the current salary for each year of service with compulsory social insurance contributions:

(3) An allowance of 03 months of current salary to seek employment:

Where:

- Current monthly salary as follows:

+ For those receiving salary according to the pay scales prescribed by the State

Current monthly salary includes: salary level according to rank, grade, position, title, professional title, and salary allowances (including: position allowance; overtime allowance; professional seniority allowance; preferential allowance according to profession; responsibility allowance according to profession; public service allowance; party, political, social organization work allowance, if any), specifically:

The statutory pay rate for calculating the current monthly salary above is the statutory pay rate prescribed by the Government of Vietnam at the time immediately preceding the month of resignation.

+ For those receiving a cash salary according to the agreement stated in the labor contract, the current monthly salary is the monthly amount recorded in the labor contract.

- Time to calculate separation allowance:

The time to calculate the separation allowance is the period of service with compulsory social insurance contributions in the agencies of the Communist Party, the State, political-social organizations, and armed forces:

+ In cases where the period of service with compulsory social insurance contributions is 05 years or more, the maximum time to calculate the separation allowance is 05 years (60 months).

+ In cases where the period of service with compulsory social insurance contributions is less than 05 years, the time to calculate the separation allowance is equivalent to the period of service with compulsory social insurance contributions.

- Number of years of service with compulsory social insurance contributions:

The time to calculate allowances according to the number of years with compulsory social insurance contributions as specified in points a, b, and c of Clause 2, Article 7; Clause 2, Article 9; and Clause 2, Article 10 of Decree 178/2024/ND-CP is the total period of service with compulsory social insurance contributions (according to each individual's social insurance book) which has not yet received separation, unemployment allowances, or has not received social insurance benefits once or reinstatement, demobilization policies.

In cases where the total time for calculating allowances includes odd months, it shall be rounded according to the principle: from 01 month to 06 months is considered 0.5 years; from over 06 months to under 12 months is rounded to 01 year.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE