How to Calculate Allowances for Streamlined Staffing Cases in 2018

To be specific, pursuant to Clause 8, Article 1 of Decree 113/2018/ND-CP amending Article 12 of Decree 108/2014/ND-CP, the calculation of allowances in cases of downsizing is regulated as follows:

First, the monthly salary for calculating the allowance as stipulated in Decree 108/2014/ND-CP includes: salary according to rank, grade or occupational title or salary table; allowances such as position allowance, seniority beyond the frame allowance, occupational seniority allowance, and the reserved difference according to the law.

Second, the monthly salary for calculating the allowance policies stipulated in Article 8, Point b, Clause 1 of Article 9, Points b, Clause 1, and Point d, Clause 2 of Article 10 of Decree 108/2014/ND-CP is the average of the last 5 years' (60 months) actual monthly salary before downsizing.

For cases with less than 5 years (less than 60 months) of working, the average of the actual monthly salary for the entire period of service is used.

Third, individuals who have received downsizing policies, if re-employed by administrative agencies or public service providers receiving salaries from the state budget or salary funds of public service providers, must return the received allowance (excluding occupational training fees as stipulated in Point b, Clause 2 of Article 10 of Decree 108/2014/ND-CP).

The following subjects, if re-employed in the state sector or state enterprises that have been equitized, must also return the downsizing allowance received:

- Chairman of the Company, Member of the Board of Members, General Director, Deputy General Director, Director, Deputy Director, Chief Accountant, Controller of a one-member limited liability company wholly owned by the State, redundant due to equitization, transfer, sale, dissolution, merger, consolidation, division, bankruptcy, or transformation into a two-member limited liability company or a public service provider as decided by the competent state authority;- Director, Deputy Director, Chief Accountant of redundant state-owned farms, forestry companies due to restructuring under the regulation of Decree 170/2004/ND-CP on restructuring, renovation, and development of state-owned farms, and Decree 200/2004/ND-CP on restructuring, renovation, and development of state-owned forestry companies.

Note: The state agency, unit or state company re-employing the individual who has received downsizing allowance has the responsibility to recover the allowance received and remit it to the state budget. The funds collected from the subjects specified in Clause 4 of Article 6 of Decree 108/2014/ND-CP must be fully remitted to the Redundant Labor Support Fund due to the restructuring of state companies.

Fourth, the effective date used as the basis for calculating the age eligible for early retirement policies is the 1st day of the following month of the subject's birth month; if the subject's records do not specify the day and month of birth, the 1st day of January of the birth year is used.

Fifth, the period for calculating the allowance is the working time at agencies of the Communist Party, the State, socio-political organizations, public service providers, state enterprises, and associations that are eligible for social insurance and mandatory social insurance contribution (according to each person's social insurance book), but have not yet received severance allowance or one-time social insurance benefits or demobilization policies.

If the period for calculating the allowance includes odd months, it is rounded as follows: under 3 months is not counted; from 3 months to 6 months is counted as 1/2 year; from over 6 months to under 12 months is rounded to 1 year.

Sixth, when downsizing incorrectly by law, the individual who has received the downsizing policies and the direct managing agency, organization, or unit have the following responsibilities:

- The individual who has received the downsizing policies must return the amount received when implementing the downsizing policies as stipulated;

If the individual dies while receiving social insurance benefits, repayment is not required, and the compensation will be covered by the regular expense budget of the direct managing agency, not from additional state budget funds.

- The direct managing agency, organization, or unit of the individual implementing the downsizing has the responsibility to:- Notify the social insurance agency to stop paying social insurance benefits to the non-conforming downsized individual;- Transfer to the social insurance agency the amount paid to the individual during the time receiving social insurance benefits (pension, social insurance allowance, health insurance card purchase cost);- Pay the individual the difference between the policies the individual is entitled to under the law on officials and public employees and the policies received under social insurance law;- Settle the policies entitled to officials and public employees under the law to the relevant organizations;- Be responsible for recovering the policies received for the downsizing policies provided to officials and public employees.

Refer to additional amendments and supplements at: Decree 113/2018/ND-CP, effective October 15, 2018.

- Nguyen Trinh -

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