Proposal to lower retirement age by 5 years

The Ministry of Labor, War Invalids and Social Affairs has proposed lowering the age of receiving social pension benefits from 80 to 75 for people who have neither pension nor social insurance benefits.

In the latest draft of the revised Social Insurance Law submitted to the Ministry of Justice for review, the Ministry of Labor, War Invalids and Social Affairs proposed that in addition to lowering the age, the elderly are eligible to receive a subsidy of VND500,000 per month from the state budget instead of VND360,000 as currently and are granted a free health insurance card. Depending on the socio-economic conditions and budget of each period, the Government will report to the National Assembly to decide to gradually reduce the age of receiving social pension benefits.

If the proposal is approved, the Ministry of Labor, War Invalids and Social Affairs estimates that 700,000 more elderly people will be added to the safety net. The annual cost is about 7,100 billion VND.

Ms. Nguyen Thi Me (77 years old) makes a living by collecting scrap on the streets of Hanoi, February 2018. Photo: Ngoc Thanh

The drafting agency believes that reducing the age of eligibility will help the elderly have more money to improve their lives. The policy also reduces pressure on localities with limited budgets because the money to pay subsidies for people over 80 is currently handled by the provinces and cities. However, raising the subsidy level will easily cause comparisons with the group receiving social protection policies, creating pressure to increase the level of assistance.

Social pensions are state budget funds provided to the elderly over 80 years old who do not have pensions or monthly social insurance benefits. The coverage of social security for the elderly after retirement age nationwide is only 35%, of which 2.7 million people receive pensions, 630,000 people receive monthly social insurance benefits and more than 1.8 million people receive social pension benefits. Resolution 28 of the Central Committee sets a target of 55% coverage by 2025 and about 60% by 2030.

The International Labor Organization predicts that without support from the state budget, by 2030 Vietnam will have over 16 million elderly people without pensions because the aging rate is faster than the economic growth rate. A survey by the United Nations Population Fund Program shows that the income of the elderly in Vietnam mostly comes from support from their children, up to 38%; 29% from continuing to work, only 15% receive pensions and 10% receive social benefits.

The draft revised Law on Social Insurance has been completed for initial consultation and is expected to be submitted to the Government in June, submitted to the National Assembly for discussion and comments at the October 2023 session, approved at the May 2024 session and effective from January 1, 2025.

Hong Chieu

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