Payment methods of voluntary social insurance of employees in Vietnam

Payment methods of voluntary social insurance of employees in Vietnam (Internet image)

This problem, LawNet would like to answer as follows:

1. Payment methods of voluntary social insurance of employees in Vietnam

According to  Article 9 of Decision 595/QD-BHXH dated April 14, 2017 (amended in Decision 505/QD-BHXH dated May 1, 2020), a participant in voluntary social insurance in Vietnam shall choose one of the following methods for making a payment to the retirement and death benefit funds:

(1) Monthly payment

(2) Quarterly payment

(3) Biannual payment

(4) Annual payment

(5) Lump sum payment for multiple years but not exceeding 5 year per payment;

(6)  Making one-off payment of contributions for years left to full entitlement to insurance benefits.

With regard to SI participants who are age-appropriate for entitlement to the old-age pension, if their contribution period left to full entitlement to insurance benefits is not more than 10 years (120 months), they may pay additional insurance contributions to complete the required 20-year cycle for entitlement to old-age pensions. 

In case of participating in the compulsory SI scheme, they can make one-off payment of voluntary SI contributions for years left to full entitlement to insurance benefits in the due month when they reach the age of eligibility for entitlement to retirement pensions.

Example 1: Mrs. A is 55 years old in March, 2017 and has paid social insurance contributions for 15 years and 9 months. Mrs. A wishes to continue participating in voluntary social insurance to satisfy conditions for receiving monthly pensions and chooses the monthly payment.

In April 2017, Mrs. A is 55 years old and 1 month and her payment period of social insurance contributions is 15 years and 10 months. In May 2017, Mrs. A wishes to make a lump sum payment for 4 years and 2 months in this month.

Therefore, until the end of May, 2017, Mrs. A is 55 years old and 2 months and her payment period of social insurance is 20 years and is eligible for receive pensions in accordance with regulations of law. Mrs. A shall receive her pensions from June, 2017.

*Note: If a participant in social insurance who has reached the statutory retirement age law but still lacks over 10 years of his/her payment period wishes to continue participating in voluntary social insurance in one of the methods prescribed in (1), (2), (3), (4), (5) until the payment period of social insurance lacks under 10 years, he/she will make a lump sum payment for remaining years to receive his/her pensions as prescribed in (6).

Example 2: Mr. B is 60 years old in August 2016 and his payment period of social insurance is 8 years. Mr. B wishes to continue participating in voluntary social insurance to be eligible for receiving monthly pensions and wishes to pay insurance contributions and premiums once per 2 years from September, 2016 to August, 2018.

In September 2018, his payment period of social insurance is 10 years and he wishes to make a lump sum payment for remaining 10 years. Therefore, until the end of September, 2018, his payment period is 20 years and he is eligible for receiving pensions as prescribed by law. Mr. B shall receive his pensions from October, 2018

2. Change of payment methods of voluntary social insurance in Vietnam

According to Clause 3, Article 9 of Decision 595/QD-BHXH dated April 14, 2017, change of payment methods of voluntary social insurance in Vietnam is specified in:

- Participants in voluntary social insurance are allowed to change payment methods when completing the previously chosen method.

- If a participant in voluntary special insurance who has chosen one of the methods prescribed in Clause 1 of Article 9 of Decision 595/QD-BHXH is eligible for making a lump sum payment for the remaining years (a man shall be 60 years old and a woman shall be 55 years old and the remaining period is 10 years or less):

He/she will be allowed to make a lump sum payment as soon as eligible and the chosen method is not required to be completed.

Example 3: Mr. C has participated in voluntary social insurance since August, 2016 and registers the quarterly payment with the social insurance authority. Subsequently, he wishes to make a biannual payment.

The method of payment is changed from November 2016. However, in January 2017, Mr. C is 60 years old and his payment period of social insurance is 10 years so he is allowed to make a lump sum payment for remaining years in January 2017 to receive his pensions.

Vo Van Hieu

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