Using 'reference level' instead of base salary to pay social insurance from 1.7

The Government and the National Assembly Standing Committee agreed to stipulate a reference level to replace the basic salary as the basis for social insurance contributions after implementing salary reform from July 1 in the revised Social Insurance Law.

On the morning of May 27, continuing the 7th session of the 15th National Assembly, the National Assembly discussed the draft revised Social Insurance Law. Regarding the salary for social insurance contributions after the basic salary was abolished when salary reform was implemented from July 1, Chairwoman of the National Assembly's Social Affairs Committee Nguyen Thuy Anh said that this content was not fully anticipated when the Government submitted it to the National Assembly at the 6th session at the end of 2023.

Chairwoman of the National Assembly's Social Affairs Committee Nguyen Thuy Anh presented a report on receiving and revising the draft Social Insurance Law.

GIA HAN

During the process of receiving and revising, after many requests, on May 15, the Government proposed to replace the "basic salary" with the "reference level" in the draft law. However, on May 25, the Government sent report No. 286 to the National Assembly proposing related contents in the draft revised Social Insurance Law due to the impact of the new salary policy. Regarding the use of the "reference level" instead of the "basic salary", the Government said that to ensure correlation with the expected salary reform plan that the Steering Committee has agreed to report to the competent authority, it is proposed to express the concept of "reference level" in the draft law. Specifically, the Government proposed the reference level as the amount of money used to calculate the contribution level and the level of enjoyment of some social insurance regimes in this law. The reference level is calculated based on the basic salary. When the basic salary is abolished, the reference level will be adjusted by the Government based on the increase in the consumer price index and economic growth, in accordance with the capacity of the state budget and the social insurance fund. Regarding the monthly salary for compulsory social insurance payment prescribed in Clause 1, Article 89 of the 2014 Social Insurance Law, the Government proposes to maintain the content presented at the 6th session in October 2023. Accordingly, for employees subject to the salary regime prescribed by the State, the salary used as the basis for compulsory social insurance payment is the monthly salary according to the salary table prescribed by the State; seniority allowance beyond the framework, seniority allowance (if any).

How does pension and lump sum benefit calculation change?

Report No. 286 of the Government also stated that with the salary reform plan that the Government has agreed to report to the competent authority, it is basically not necessary to immediately comprehensively amend Article 62 (on the average monthly salary for social insurance contribution to calculate pension and one-time allowance) and Article 63 (on adjusting the salary for social insurance contribution) of the current law as previously proposed by the Government. The Government also proposed to keep these provisions as the draft submitted to the National Assembly at the October 6, 2023 session.

Minister of Labor, Invalids and Social Affairs Dao Ngoc Dung, representative of the agency in charge of the review at the discussion session.

GIA HAN

According to Ms. Thuy Anh, based on the Government's report, also on May 25, the National Assembly Standing Committee issued a report on receiving, explaining, and adjusting the provisions of the draft revised Social Insurance Law on the average salary as the basis for social insurance contributions to calculate pensions and one-time allowances (Article 76) and adjusting salaries as the basis for compulsory social insurance contributions (Article 77) submitted to the National Assembly. According to Ms. Thuy Anh, the National Assembly Standing Committee agrees with the Government's proposal, but believes that these provisions are related to millions of people who have, are, and will receive pensions. Therefore, they need to be considered comprehensively and thoroughly in the context of implementing salary reform, and at the same time, it is necessary to carefully assess the impact on pensioners at different times, in different regions and fields. The National Assembly Standing Committee requests that National Assembly deputies carefully study, discuss, and give frank and clear opinions on this issue. The revised Social Insurance Law will be implemented from the 6th session in October 2023, in the context of implementing salary reform. According to the agenda, the law will be approved by the National Assembly at the 7th session of the 15th National Assembly this time.

Provisions in Articles 76 and 77 as proposed by the Government

Article 76. Average salary level used as basis for social insurance payment to calculate pension and one-time allowance 1. For employees subject to the salary regime prescribed by the State and having paid social insurance for the entire period of time under this salary regime, the average salary used as basis for social insurance payment for the number of years of social insurance payment before retirement shall be calculated as follows: a) Starting to participate in social insurance before January 1, 1995, the average salary used as basis for social insurance payment for the last 5 years before retirement shall be calculated; b) Starting to participate in social insurance during the period from January 1, 1995 to December 31, 2000, the average salary used as basis for social insurance payment for the last 6 years before retirement shall be calculated; c) Starting to participate in social insurance during the period from January 1, 2001 to December 31, 2006, the average salary used as basis for social insurance payment for the last 8 years before retirement shall be calculated; d) Starting to participate in social insurance from January 1, 2007 to December 31, 2015, the average salary used as the basis for social insurance contributions for the last 10 years before retirement will be calculated; dd) Starting to participate in social insurance from January 1, 2016 to December 31, 2019, the average salary used as the basis for social insurance contributions for the last 15 years before retirement will be calculated; e) Starting to participate in social insurance from January 1, 2020 to December 31, 2024, the average salary used as the basis for social insurance contributions for the last 20 years before retirement will be calculated; g) Starting to participate in social insurance from January 1, 2025 onwards, the average salary used as the basis for social insurance contributions for the entire period of social insurance contributions will be calculated. h) In case, during the process of paying social insurance according to the salary regime prescribed by the State according to points a, b, c, d, dd and e of this clause, the employee has a period of social insurance payment adjacent to the average salary used as the basis for payment of this period higher than the average salary used as the basis for social insurance payment of the last years, the employee can choose the salary used as the basis for paying social insurance corresponding to the number of years prescribed in this clause to calculate the average salary used as the basis for social insurance payment. i) The Government shall prescribe the calculation of the average salary used as the basis for social insurance payment when the State implements salary policy reform for cadres, civil servants, public employees and armed forces. 2. For employees who have paid social insurance for the entire period under the salary regime decided by the employer, the average salary used as the basis for social insurance payment for the entire period shall be calculated. 3. Employees who have both paid social insurance for a period of time subject to the salary regime prescribed by the State and paid social insurance for a period of time subject to the salary regime decided by the employer shall have their average salary used as the basis for paying social insurance for all periods calculated, in which the period of time subject to the salary regime prescribed by the State shall be calculated as the average salary used as the basis for paying social insurance as prescribed in Clause 1 of this Article over the total period of time subject to the salary regime prescribed by the State. 4. The Government shall detail this Article". "Article 77. Adjustment of salary used as the basis for paying compulsory social insurance 1. The salary used as the basis for paying compulsory social insurance to calculate the average level prescribed in Article 76 of this Law for employees subject to the salary regime prescribed by the State shall be adjusted as follows: a) For employees who started participating in social insurance before January 1, 2016, it shall be adjusted according to the basic salary level at the time of receiving retirement benefits. The Government shall regulate the adjustment of salaries as the basis for compulsory social insurance contributions when the State implements salary policy reforms for cadres, civil servants, public employees, and armed forces. b) For employees who start participating in social insurance from January 1, 2016 onwards, they shall be adjusted as prescribed in Clause 2 of this Article. 2. The salary as the basis for compulsory social insurance contributions to calculate the average level prescribed in Article 76 of this Law for employees subject to the salary regime decided by the employer shall be adjusted based on the consumer price index of each period according to the Government's regulations.

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Source: https://thanhnien.vn/dung-muc-tham-chieu-thay-luong-co-so-de-dong-bhxh-tu-17-18524052709333876.htm