Guidelines on calculating severance allowance for commune officials when reorganizing organizational structure in Vietnam

Guidelines on calculating severance allowance for commune officials when reorganizing organizational structure in Vietnam​ (Image from Internet)

On January 17, 2025, the Minister of Home Affairs of Vietnam issued Circular 1/2025/TT-BNV guiding the implementation of policies concerning officials and public employees, and employees in carrying out the restructuring of the organizational structure of the political system.

Guidelines on calculating severance allowance for commune officials when reorganizing organizational structure in Vietnam

According to Article 5 of Circular 1/2025/TT-BNV, the Ministry of Home Affairs provides guidance on calculating severance allowances for commune officials when implementing the restructuring of organizational structure as follows:

Officials, and commune-level officials as stipulated in Article 2 of Circular 1/2025/TT-BNV who are authorized to resign shall retain their social insurance contribution periods or receive a lump-sum social insurance benefit in accordance with the law on social insurance as specified in Clause 3, Article 9 of Decree 178/2024/ND-CP; simultaneously, they shall receive 03 types of allowance specified in Clause 1, Clause 2, and Clause 4, Article 9 of Decree 178/2024/ND-CP, wherein the severance allowance is calculated as follows:

- For those resigning within the first 12 months:

Allowance = Current monthly salary x 0.8 x Period for calculating severance allowance

- For those resigning from the 13th month onward:

Allowance = Current monthly salary x 0.4 x Period for calculating severance allowance

Wherein:

- The current monthly salary is determined as follows:

+ For those receiving salaries according to the State-prescribed salary scales:

The current monthly salary includes: The salary level according to rank, grade, position, title, professional title, and allowances (including: Leadership position allowance; seniority allowance beyond the scale; occupational seniority allowance; professional preferential allowance; occupational responsibility allowance; public service allowance; political-social organization, group operational allowance, if any), specifically:

Current monthly salary = |Salary coefficient according to rank, grade, position, title, professional title x Statutory pay rate| + |Leadership position allowance coefficient (if any) x Statutory pay rate| + The amount of allowances calculated according to salary rank, grade, position, title, professional title (if any)

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 an agreed salary recorded in the labor contract, the current monthly salary is the monthly wage recorded in the labor contract.

- The period for calculating severance allowance is the service period with compulsory social insurance contributions in agencies of the Communist Party, State, political-social organizations, and armed forces specified in Article 1 of Decree 178/2024/ND-CP:

+ In case the working period with compulsory social insurance contributions is 05 years or more, the maximum period for calculating severance allowance is 05 years (60 months).

+ In case the working period with compulsory social insurance contributions is less than 05 years, the period for calculating severance allowance is equal to the working period with compulsory social insurance contributions.

In addition to the severance allowance, commune-level officials shall receive an additional allowance of 1.5 months of the current monthly salary for each year of service with compulsory social insurance contributions and an allowance of 03 months of the current monthly salary for job searching as calculated below:

- Allowance of 1.5 months' current monthly salary for each year of service with compulsory social insurance contributions:

Allowance = Current monthly salary x 1.5 x Number of years of service with compulsory social insurance contributions

- Allowance of 03 months' current monthly salary for job searching:

Allowance = Current monthly salary x 3

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