On July 1, 2025, the Vietnamese Law on Social Insurance officially took effect with many important changes. Notable new points include the adjustment of conditions for pension enjoyment, social benefits, regulations on one-time withdrawal of social insurance, along with the expansion of compulsory social insurance participants. Details of the changes are as follows:
1. Shorten the minimum social insurance payment period to enjoy pension
The Law on Social Insurance 2024 stipulates to reduce the minimum social insurance payment period from 20 years to 15 years for both men and women to create conditions for employees to enjoy pension earlier.
2. Adjustment of the method of calculating the pension rate
With the reduction of the minimum number of years of social insurance payment, the pension calculation formula has also changed.
For Female Employees: The pension entitlement rate remains the same: 45% of the average salary with 15 years of social insurance payment. Each additional payment year is then added 2%. The maximum rate is 75% when full 30 years of paying social insurance.
For Male Employees: The benefit level of 45% is maintained for 20 years of social insurance payment. Each year of additional payment, then add 2%. The maximum rate is 75% when full 35 years of payment.
Supplementary (applicable to men who pay from 15 to less than 20 years): The benefit level starts from 40%, each additional payment year is added 1%, and the maximum rate is still 75% at 35 years of payment.
3. Supplement one-time allowance upon retirement
Employees who pay social insurance premiums in excess of the maximum number of years to enjoy pensions (30 years for women and 35 years for men) will receive a lump-sum allowance for each surplus year. The allowance is 0.5 months’ salary for each surplus year and will be paid at the same time as the pension.
4. Supplementing the social pension allowance regime
The new law has added a social pension system, which provides a state budget allowance for those who do not have a pension. Notably, the new regulations reduce the age of receiving social benefits:
- From 80 to 75 years old for the average person.
- Down to 70 years old for people belonging to poor and near-poor households.
5. Monthly allowance for persons who are not eligible for pension
Employees who have reached retirement age but have not paid social insurance for less than 15 years will receive monthly social insurance benefits from the paid social insurance fund. This benefit will be paid until the employee is eligible for social pension benefits.
During the period of receiving this allowance, the employee will also be paid health insurance by the State.
6. Tightening the conditions for withdrawing social insurance 1 time
The Law on Social Insurance 2024 (applicable from July 1, 2025) has introduced stricter regulations to limit the withdrawal of one-time social insurance. Accordingly, employees participating in social insurance from this date are only allowed to withdraw social insurance once in some special cases, including:
- Settle abroad.
- Suffering from a critical illness.
- Having a decrease in working capacity of 81% or more.
- Full retirement age but not yet full years of paying social insurance.
At the same time, the time for processing one-time social insurance withdrawal dossiers is also shortened to 7 working days.
7. Expanding the subjects participating in compulsory social insurance
The Law on Social Insurance 2024 expands the participants in compulsory social insurance including groups that have never participated before such as registered business household owners, part-time workers, part-time workers at the commune, village, and neighborhood levels, and unpaid business managers.
8. Supplementing maternity benefits for voluntary social insurance participants
Employees participating in voluntary social insurance will be entitled to additional maternity benefits, including subsidies for female employees who give birth. Previously, voluntary social insurance only had retirement and survivorship regimes.
9. Changes in the basis for calculation of social insurance premiums and entitlements
The Law on Social Insurance 2024 changes the term “base salary” to “reference level” as a basis for calculating social insurance contributions and entitlements.
If the State has not abolished the base salary, the reference level will be equal to the current base salary.
10. Strengthening sanctions for handling social insurance violations
The new law stipulates a fixed late payment interest rate of 0.03%/day on the late payment amount, instead of the interbank interest rate as before.
At the same time, the regulations also emphasize the arrears and criminal handling of the employer’s evasion of social insurance payments.
