VI In the trend of international economic integration, the number of foreign employees moving to Vietnam for work has been continuously increasing, leading to their robust participation in the compulsory social insurance system. Moving into 2026, with the application of new provisions from the Law on Social Insurance regarding the timeline for dossier submission, processing procedures, and methods for calculating lump-sum allowance levels, important adjustments have been implemented to maximize the protection of the lawful rights and interests of expatriates before leaving Vietnam. Mastering this legal framework not only helps employees optimize their legitimate financial benefits but also supports enterprises in properly performing their patron role, thereby avoiding unnecessary administrative errors. To comprehensively and accurately update the currently applicable standards, let us explore the regulations on lump-sum social insurance allowance for foreign employees with Pham Consult right below.
- Regulations on lump-sum social insurance allowance for foreign employees
According to Article 70 of the Law on Social Insurance 2024 (effective from July 1, 2025), foreign employees working in Vietnam who are subject to compulsory social insurance participation when working under a definite-term labor contract with a term of full 12 months or more with an employer in Vietnam (except for the cases specified in Clause 2, Article 2 of the Law on Social Insurance 2024) shall have the right to request a lump-sum social insurance payout if they fall into one of the following cases:
– They have reached the retirement age but have not accumulated full 15 years of social insurance contributions;
– They are suffering from one of the following diseases: cancer, poliomyelitis, decompensated cirrhosis, severe tuberculosis, or AIDS;
– They have a working capacity reduction of 81% or more; or are persons with exceptionally severe disabilities;
– They fully satisfy the conditions for receiving a monthly pension as prescribed but no longer reside in Vietnam;
– Their labor contract is terminated, or their work permit, practicing certificate, or practicing license expires without being extended.
From the provisions of Article 70, reference can be made to Clause 2, Article 2 of the Law on Social Insurance 2024, which stipulates the cases not subject to compulsory social insurance participation as follows:
– Intra-company transferees as prescribed by the law on foreign employees working in Vietnam;
– At the time of entering into the labor contract, they have reached the retirement age as prescribed in Clause 2, Article 169 of the Labor Code;
– An international treaty to which the Socialist Republic of Vietnam is a member contains alternative provisions.
- Lump-sum social insurance allowance levels for foreign employees
The lump-sum social insurance allowance level shall be calculated based on the number of years of social insurance contributions made and the contribution basis, excluding the state budget’s financial support for voluntary social insurance contributions. For each year of contribution, it is calculated as follows:
– Equal to 1.5 months of the average monthly salary on which social insurance contributions are based for the years of contribution prior to 2014.
In case an employee has periods of social insurance contribution both before and after 2014, and the contribution period prior to 2014 has remaining odd months, such odd months shall be carried forward to the contribution period from 2014 onwards for the calculation of the lump-sum social insurance allowance level;
– Equal to 02 months of the average monthly salary on which social insurance contributions are based for the years of contribution from 2014 onwards;
In case the period of social insurance contribution is less than one year, the allowance level shall be equal to the amount contributed, but shall not exceed 02 months of the average monthly salary on which social insurance contributions are based.
– The average monthly salary used as the basis for social insurance contributions for an employee whose entire contribution period is based on the salary regime decided by the employer shall be calculated as follows:
Mbqtl = Total salary used as the basis for social insurance contributions of months with contributions / Total number of months of social insurance contributions
Where:
+ Mbqtl: The average monthly salary used as the basis for social insurance contributions;
+ The salary used as the basis for social insurance contributions is the salary that has been adjusted in accordance with the provisions of Clause 2, Article 73 of the Law on Social Insurance.
– In case an employee whose labor contract is terminated, or whose work permit, practicing certificate, or practicing license expires without being extended, simultaneously qualifies for a monthly pension and satisfies the conditions for a lump-sum social insurance allowance, the employee shall have the right to choose between receiving a monthly pension or a lump-sum social insurance allowance.
- Dossier for requesting lump-sum social insurance allowance for foreign employees
According to Article 78 of the Law on Social Insurance 2024, a dossier for requesting a lump-sum social insurance allowance includes:
– The social insurance book;
– A written request for lump-sum social insurance allowance executed by the employee.
– For cases where the foreign employee is suffering from cancer, poliomyelitis, decompensated cirrhosis, severe tuberculosis, or AIDS: a medical record summary, or the original or a copy of the hospital discharge certificate is additionally required.
– For cases where the foreign employee has a working capacity reduction of 81% or more, or is an exceptionally severely disabled person: an assessment minutes of the working capacity reduction issued by the Medical Assessment Council, or a copy of the certificate of exceptionally severe disability is additionally required.
- Sequence and procedures for requesting lump-sum social insurance allowance for foreign employees
An employee who meets the conditions for receiving a lump-sum social insurance allowance shall submit a dossier to the social insurance agency.
Within 07 working days from the date of receipt of a complete and valid dossier as prescribed from the person requesting the lump-sum social insurance allowance, the social insurance agency shall be responsible for processing the settlement; in case of refusal to settle, it must issue a written reply clearly stating the reasons therefor.
