Currently, issues related to social security policies are receiving increasing attention. One of the significant concerns for workers and citizens is their pension income upon retirement. In today’s article, Pham Consult will provide information about the group of individuals eligible for pension increase in 2023. Let’s dive in and find out more!
Who are the individuals eligible for pension increase in 2023?
Recently, the Government has implemented a pension increase adjustment for certain individuals in 2023 under Decree 42/2023/ND-CP.
According to Decree 42/2023/ND-CP, starting from July 1, 2023, the pension increase will be carried out as follows:
- An additional increase of 12.5% on the pension amount, social insurance allowance, and monthly allowance for June 2023 will be applied to the individuals specified in Section 1, Article 1 of Decree 42/2023/ND-CP, which has been adjusted according to Decree 108/2021/ND-CP.
- An additional increase of 20.8% on the pension amount, social insurance allowance, and monthly allowance for June 2023 will be applied to the individuals specified in Section 1, Article 1 of Decree 42/2023/ND-CP, which has not been adjusted according to Decree 108/2021/ND-CP.
Specifically, the individuals eligible for pension increase in 2023, according to Decree 42/2023/ND-CP, are determined as follows:
(1) Individuals receiving pension, social insurance allowance, and monthly allowance prior to July 1, 2023:
- Officials, civil servants, workers, employees, and laborers (including those voluntarily participating in voluntary social insurance, retired from the Nghệ An Farmer Social Insurance Fund according to Decision 41/2009/QD-TTg); military personnel, police officers, and personnel working in essential positions receiving monthly pension.
- Commune, ward, town officials.
- Individuals receiving monthly labor capacity loss allowance; individuals receiving monthly allowances according to Decision 91/2000/QD-TTg, Decision 613/QD-TTg in 2010; rubber workers receiving monthly allowances according to Decision 206-CP in 1979.
- Commune, ward, town officials receiving monthly allowances according to Decision 130-CP in 1975 and Decision 111-HDBT in 1981.
- Military personnel receiving monthly allowances according to Decision 142/2008/QD-TTg (amended and supplemented by Decision 38/2010/QD-TTg).
- Police officers receiving monthly allowances according to Decision 53/2010/QD-TTg in 2010.
- Military personnel, police officers, and personnel working in essential positions receiving military or police-like salaries and monthly allowances according to Decision 62/2011/QD-TTg.
(2) The individuals specified in points a, b, c, d, đ, e, and g of Section 1, Article 1 of Decree 42/2023/ND-CP who retired and were receiving pension, social insurance allowance, and monthly allowance before January 1, 1995, still have a pension amount below 3,000,000 Vietnamese Dong per month even after the adjustment.
In the last two months of 2023 (November and December 2023), there are still no regulations or announcements regarding pension increase during this period. Therefore, if there are no changes, the individuals eligible for pension increase in 2023 would only include those listed for the July 2023 adjustment mentioned above.
What is the latest news regarding pension increases in 2024?
According to the closing statement of the Vietnam Economic-Social Forum 2023 by the Chairman of the National Assembly, it is highly likely that wage reform will start to be implemented from July 1, 2024.
Under the authorization of the Prime Minister, on October 23, 2023, the Minister of Finance reported to the National Assembly on the implementation of the state budget in 2023, the state budget estimate, and the plan for central budget allocation in 2024.
Accordingly, it is expected to ensure the implementation of comprehensive wage policy reform in accordance with Resolution 27-NQ/TW from July 1, 2024.
In addition, the Government has allocated funds for the implementation of wage policy reform based on the central conclusions, allocated resources for pension increases, social insurance allowances, and monthly allowances for eligible individuals ensured by the budget, and enhanced preferential treatment for those with meritorious services and some social security schemes to partially offset inflationary effects and provide additional benefits.
Therefore, it can be seen that from July 1, 2024, the Government will implement pension increases concurrently with wage policy reform. Additionally, when implementing wage policy reform, the basic wage level will be eliminated.
However, according to the current regulations, for employees receiving salaries paid by the state and who started participating in social insurance before January 1, 2016, the base wage level at the time of entitlement will be used to calculate the average monthly social insurance contribution as a basis for determining the pension amount.
Therefore, it is possible that when implementing wage policy reform, adjustments will be made to the pension scheme for these individuals to align with the elimination of the basic wage level.
The calculation formula for pensions according to the current regulations is based on Article 7 of Decree 115/2015/ND-CP and is as follows:
|The monthly pension amount.||=||The percentage (%) of the monthly pension amount received.||X||The average monthly salary used for social insurance contributions.|
In this case:
(1) Pension rate
Based on the provisions stated in Clause 2 of Article 7 of Decree 115/2015/ND-CP, Article 16 of Circular 59/2015/TT-BLDTBXH, and Article 17 of Circular 59/2015/TT-BLDTBXH.
The monthly pension rate for eligible workers is as follows:
|The retirement age||The pension rate||The number of years of social insurance contribution||The additional percentage rate|
|From January 1, 2016, to before January 1, 2018||45%||15 years||For each additional year of social insurance contributions, an additional 2% is calculated for males and 3% for females.|
|From January 1, 2018, onwards.||45%||– For female workers: 15 years of social insurance contributions.
– For male workers:
+ 16 years if retiring in 2018.
+ 17 years if retiring in 2019.
+ 18 years if retiring in 2020.
+ 19 years if retiring in 2021.
+ 20 years if retiring from 2022 onwards.
|For each additional year of social insurance contributions, an additional 2% is calculated|
In this case:
– The maximum pension rate is 75%.
– When calculating the pension rate, if the period of social insurance contributions includes fractional months, from 01 month to 06 months is counted as half a year, and from 07 months to 11 months is counted as one year.
(2) Average monthly salary for social insurance contributions
The average monthly salary used for calculating the pension is determined according to the provisions in Article 9 of Decree 115/2015/ND-CP.
So, through the article, we have gained additional information about the group of individuals who have received an increase.