SOCIAL INSURANCE LAW 2024 REPLACES SOCIAL INSURANCE LAW 2014SHALL TAKE EFFECT FROM 01 JULY 2025.

The 2024 Social Insurance Law, which officially takes effect from 01 July 2025, introduces substantial reforms to Vietnam’s social security system. The amendments focus on expanding coverage, adjusting retirement benefits, and imposing stricter conditions on lump-sum social insurance withdrawals, aiming to encourage long-term contributions and improve effectiveness of the social insurance system.

Accordingly, some notable changes compared to the Social Insurance Law 2014 are as follows:

I. Expansion of the scope of individuals subject to compulsory social insurance

According to Article 2 of the Social Insurance Law 2024, the scope of individuals subject to mandatory social insurance has been expanded as follows:

- Employees under indefinite-term or fixed-term contracts of at least 01 month, regardless of whether their names are directly listed by the employers or via referral arrangements, provided that the job description, wage, and management party are specified;

- Spouses who accompany members of Vietnamese diplomatic missions overseas during their tenure, do not receive salaries from state budget, and are entitled to subsistence allowances;

- Part-time officials in communes, wards, and townships;

- Employees working on a non-full-time basis whose wages are equal to or higher than the minimum threshold for compulsory social insurance contribution;

-Owners of household businesses;

- Enterprise managers, controllers, representatives of state capital, representatives of enterprises’ capital as prescribed by law; members of Boards of Directors, General Directors, Directors, members of Boards of Controllers or Controllers, and other elected managerial positions of cooperatives and cooperative unions prescribed by the Law on Cooperatives who do not receive salaries.

II. Legal Basis for Determining Social Insurance Contributions

- Reference Level: According to Article 7 of the Social Insurance Law 2024, the reference level is defined as follows:

+ The reference level refers to the monetary amount determined by the Government for calculating the contribution rates and entitlements under specific social insurance regimes stipulated in this Law.

+ The reference level shall be adjusted according to the increase in consumer price index, economic growth, in consideration of the capacity of state budget and social insurance.

- Contribution Basis: According to Article 31 of the Social Insurance Law 2024, the salary used as the basis for social insurance contributions is stipulated as follows:

+ The minimum salary for calculating compulsory social insurance contributions shall range from 1 to 20 times the Government-determined reference level applicable at the time of payment.

+ The minimum income for calculating voluntary social insurance contributions shall correspond to the income level of poor households in rural areas and shall not exceed 20 times the applicable reference level at the time of contribution.

III. Conditions for Receiving Retirement Pension and Social Allowance

- Tightened regulations on one-time social insurance withdrawal: According to Article 70 of the Social Insurance Law 2024, employees who have ceased participation in social insurance and make a request are entitled to a one-time social insurance payment if they fall into one of the following categories:

+ The employee has reached the retirement age but has not completed 15 years of social insurance

contributions;

+ The employee emigrates from Vietnam to a foreign country;

+ The employee has one of the following diseases: cancer, polio, decompensated cirrhosis, severe tuberculosis, AIDS;

+ The employee has a reduction in working capacity of 81% or more, or has a severe disability;

+ Before the effective date of this Law, the employee has paid social insurance for less than 20 years and does not participate in voluntary social insurance after 12 months since the day they are no longer covered by compulsory social insurance.

- Reduced conditions for retirement pension eligibility: From 01 July 2025, under Article 64 of the Social Insurance Law 2024, employees who have reached the statutory retirement age and have contributed to social insurance for at least 15 years will be eligible to receive a retirement pension.

- Expanded pension access for overseas workers: Clause 4, Article 66 of the Social Insurance Law 2024 supplements regulations allowing the aggregation of social insurance contribution periods between Vietnam and other countries for migrant workers. Under this regulation, when calculating the monthly retirement pension for eligible workers who have contributed to foreign social insurance schemes under international agreements to which Vietnam is a party, and whose Vietnamese contribution period is under 15 years, each year of contribution will be calculated at 2.25% of the average monthly salary used as the basis for social insurance contribution.

- Age for receiving social retirement allowance: From 01 July 2025, individuals aged 75 years or older will be eligible to receive a social retirement allowance. Notably, individuals from poor or near-poor households who are aged from 70 to under 75 years and meet specific eligibility conditions will also be entitled to this benefit.

IV. Deadline for Mandatory Social Insurance Contributions by Employers

According to Article 34 of the Social Insurance Law 2024, the deadline for mandatory social insurance

contributions by employers is stipulated as follows:

- The last day of the succeeding month for monthly payment;

-The last day of the month following the end of the quarterly or biannual payment cycle

This Law comes into force from 01 July 2025.

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RSM Hanoi_Social Insurance 2024_25062025.pdf

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