Many allowances increase with base salary

From July 1, many benefits for workers will increase according to the basic salary.

The Government has just issued Decree No. 24/2023/ND-CP dated May 14, 2023, stipulating the basic salary for cadres, civil servants, public employees and armed forces. From July 1, 2023, the basic salary will increase from VND 1.49 million to VND 1.8 million/month.

Not only will the salaries of officials, civil servants, public employees and armed forces increase according to the new basic salary level, but many allowances for employees under the Social Insurance Law will also be adjusted to increase according to the basic salary from July 1.

Increase minimum pension benefits

The 2014 Social Insurance Law stipulates that employees who have paid compulsory social insurance for 20 years or more shall have their pension conditions and levels implemented according to the compulsory social insurance policy. The lowest monthly pension level of employees participating in compulsory social insurance who are eligible for pension according to the provisions of Articles 54 and 55 of the 2014 Social Insurance Law is equal to the basic salary.

Thus, the lowest monthly pension for this group of people will increase to VND1,800,000 from July 1, instead of the current VND1.49 million.

Increase maternity allowance

The one-time allowance for childbirth or adoption will be adjusted when the basic salary increases. Accordingly, the Law on Social Insurance 2014 stipulates that female employees who give birth or employees who adopt children under 6 months old will receive a one-time allowance for each child equal to 2 times the basic salary in the month the female employee gives birth or the month the employee adopts the child. In case the child is born but only the father participates in social insurance, the father will receive a one-time allowance equal to 2 times the basic salary in the month of childbirth for each child.

Thus, from July 1, the one-time subsidy for giving birth or adopting a child will be increased to 3.6 million VND, instead of 2.98 million VND as at present.

In addition, the level of benefits for recuperation and health recovery after giving birth has also been adjusted to increase. The level of benefits for recuperation and health recovery after giving birth per day is equal to 30% of the basic salary (Clause 3, Article 41 of the Social Insurance Law 2014) and will increase to VND540,000 (currently VND447,000) from July 1.

Increase the level of health care and recovery benefits after illness

According to Clause 3, Article 29 of the 2014 Law on Social Insurance, the level of health recovery benefits after illness per day is equal to 30% of the basic salary.

When the basic salary increases from July 1 to 1.8 million VND, the benefit for recuperation and health recovery after illness will increase to 540,000 VND, currently 447,000 VND.

Increase in disability benefits

Regarding one-time allowance, Article 46 of the 2014 Law on Social Insurance stipulates that employees whose working capacity is reduced from 5% to 30% are entitled to one-time allowance and the allowance level is calculated based on the basic salary.

If the working capacity is reduced by 5%, the employee will receive 5 times the basic salary, which is an increase of 9 million VND compared to the current 7.45 million VND. After that, for every additional 1% reduction, the employee will receive an additional 0.5 times the basic salary (which increases to 900,000 VND instead of 745,000 VND as at present).

Regarding monthly allowances, Article 47 of the 2014 Law on Social Insurance stipulates that employees with a 31% or greater reduction in working capacity are entitled to monthly allowances. Accordingly, a 31% reduction in working capacity is entitled to 30% of the basic salary, and then for each additional 1% reduction, an additional 2% of the basic salary is entitled to.

Thus, from July 1, for every 31% reduction in working capacity, the allowance is 540,000 VND (currently 447,000 VND), then for every additional 1% reduction, the allowance is 36,000 VND (currently 29,800 VND).

The service allowance level has also been adjusted to increase. For employees with a reduced working capacity of 81% or more, who are paralyzed by the spine or blind in both eyes or have amputated or paraplegic limbs or are mentally ill, in addition to the monthly allowance, they will also receive a service allowance equal to the basic salary (ie from July 1, it will increase to 1.8 million VND compared to the current 1.49 million VND).

Death benefits due to work accidents and occupational diseases

Article 51 of the 2014 Law on Social Insurance stipulates that if a worker dies due to a work accident or occupational disease while working, or dies during the first treatment period due to a work accident or occupational disease, his or her relatives will receive a one-time allowance equal to 36 times the basic salary, equivalent to 64.8 million VND from July 1.

Thus, the one-time subsidy for death due to work-related accidents or occupational diseases from July 1 will increase by VND11.16 million compared to the current subsidy of VND53.64 million.

Increase the level of health care and rehabilitation allowance

Clause 2, Article 52 of the 2014 Law on Social Insurance stipulates that the level of benefits for recuperation and health recovery after treatment of injuries and illnesses per day is equal to 25% of the basic salary. If recuperation and health recovery take place at home, the benefit level will increase from July 1 to 450,000 VND instead of 372,500 VND as present; equal to 40% of the basic salary. If recuperation and health recovery take place at a centralized facility, the benefit level will increase to 720,000 VND instead of 596,000 VND.

Adjustment of monthly funeral allowance and death allowance

In case an employee who is eligible for funeral benefits dies, the person in charge of the funeral will receive a one-time funeral benefit equal to 10 times the basic salary. Accordingly, the funeral benefit from July 1 will increase to VND18 million compared to VND14.9 million under current regulations.

The monthly death benefit for relatives when a worker dies has also been adjusted to increase. The 2014 Social Insurance Law stipulates that the monthly death benefit for each relative is equal to 50% of the basic salary, thus increasing from VND 745,000 to VND 900,000; in cases where the relative does not have a direct caregiver, the monthly death benefit is equal to 70% of the basic salary, increasing from VND 1.043 million to VND 1.26 million.

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