Increase in statutory pay rate for the year 2020: Vietnamese officials and public employees receive additional payments

Illustrative image

If this proposal by the Government of Vietnam is approved by the National Assembly, it will be the highest increase in recent years (the increases in previous years ranged from VND 60,000/month to VND 100,000/month).

With this increase in the statutory pay rate, officials and public employees will receive additional increments starting from July 1, 2020:

1. Increase in salary and actual allowances of officials

With the proposed increase in the statutory pay rate to VND 1,600,000/month from July 1, 2020, an increase of VND 110,000/month compared to the current rate, the salaries and allowances of officials and public employees will also be adjusted accordingly. Specifically:

- For salary:The salary of officials = Statutory pay rate x Current salary coefficient.

From July 1, 2020, the monthly salary of officials will be = VND 1,600,000/month x Current salary coefficient.

- For allowances calculated based on the statutory pay rate:Allowance amount = Statutory pay rate of VND 1,600,000/month x Current allowance coefficient.

- For allowances calculated as a percentage of the current salary plus leadership allowance and excess seniority allowance:Allowance amount = (Salary from July 1, 2020 + Leadership position allowance and excess seniority allowance from July 1, 2020) x Percentage allowance as per regulations.

- For the amount of the retention difference coefficient calculated as:Amount of the retention difference coefficient = VND 1,600,000/month x Current retention difference coefficient.

- Additionally, for delegates of the People's Council at all levels, the activity fee is calculated as:Activity fee = Statutory pay rate of VND 1,600,000 x Activity fee coefficient as per regulations.

2. Increase in social insurance benefits

With the increase in the statutory pay rate to VND 1,600,000/month, the types of social insurance benefits calculated based on the statutory pay rate will also increase accordingly. For example:

- One-time maternity benefit = VND 1,600,000 x 2 = VND 3,200,000 (previously VND 2,980,000).

- Postpartum recovery benefit = VND 1,600,000 x 30% = VND 480,000/day (previously VND 447,000).

- Funeral allowance = VND 1,600,000 x 10 = VND 16,000,000 (previously VND 14,900,000).

- …

3. Increase in the minimum monthly retirement salary

According to Clause 5, Article 56 of the Law on Social Insurance 2014, the minimum monthly retirement salary for employees participating in mandatory social insurance, who are eligible for retirement, is equal to the statutory pay rate, except for the cases specified at point i, clause 1, Article 2 and clause 3, Article 54 of this Law.

Therefore, currently, the minimum monthly retirement salary for employees is VND 1,490,000, but if the proposal is approved, from July 1, 2020, the minimum retirement salary will be VND 1,600,000.

4. Increased rewards for Communist Party members

According to Guidelines 56-HD/VPTW, many reward levels for Communist Party members are based on the statutory pay rate.

Therefore, when the statutory pay rate increases to VND 1,600,000/month, these reward levels will also increase accordingly. For example, the reward levels associated with the Communist Party Badge will be as follows:

- 30-year Communist Party Badge = 1.5 times the statutory pay rate = VND 1,600,000 x 1.5 = VND 2,400,000;

- 40-year Communist Party Badge = 2.0 times the statutory pay rate = VND 1,600,000 x 2 = VND 3,200,000;

- 50-year Communist Party Badge = 3.0 times the statutory pay rate = VND 1,600,000 x 3 = VND 4,800,000;

- 55-year Communist Party Badge = 3.5 times the statutory pay rate = VND 1,600,000 x 3.5 = VND 5,600,000;

- 60-year Communist Party Badge = 5.0 times the statutory pay rate = VND 1,600,000 x 5 = VND 8,000,000;

- 65-year Communist Party Badge = 6.0 times the statutory pay rate = VND 1,600,000 x 6 = VND 9,600,000;

- 70-year Communist Party Badge = 8.0 times the statutory pay rate = VND 1,600,000 x 8 = VND 12,800,000;

- 75-year Communist Party Badge = 10.0 times the statutory pay rate = VND 1,600,000 x 10 = VND 16,000,000;

- 80-year Communist Party Badge = 15.0 times the statutory pay rate = VND 1,600,000 x 15 = VND 24,000,000.

Nguyen Trinh

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE