On June 29, 2024, the National Assembly passed the Social Insurance Law 2024, which consists of 11 chapters and 141 articles, and will take effect on July 1, 2025.
Smart SP brings to businesses the key updates that both employees and employers need to be aware of:
1. Introduction of social pension allowance
The new law introduces a social pension allowance as part of a multi-tiered social insurance system. Specifically, Vietnamese citizens aged 75 and older who do not receive a pension, monthly social insurance benefits, or other social allowances will be entitled to a social pension allowance funded by the state budget. The government will regulate and adjust this allowance according to economic and social conditions over time.
2. Expansion of mandatory social insurance coverage
The law expands the scope of mandatory social insurance coverage to include:
- Household business owners with registered business licenses.
- Business managers and cooperative executives who do not receive a salary.
- Part-time and flexible workers.
- Non-specialized workers in villages and residential groups.
This expansion aims to enhance social insurance coverage, ensuring more workers receive protection and benefits.
3. Reduction of minimum contribution period for pension eligibility
A notable change is the reduction of the minimum social insurance contribution period required to receive a pension—from 20 years to 15 years. This change provides opportunities for those who join the system late or have irregular contribution periods to still qualify for a pension upon reaching retirement age.
4. Regulations on one-time social insurance withdrawal
From July 1, 2025, employees who enroll in social insurance after this date will not be eligible to withdraw their social insurance benefits in a lump sum, except in the following cases:
- Reaching retirement age but having contributed for less than 15 years.
- Permanently relocating abroad.
- Suffering from life-threatening diseases such as cancer, paralysis, end-stage liver cirrhosis, severe tuberculosis, AIDS, etc.
- Workers with social insurance contributions before July 1, 2025, who have not participated in mandatory or voluntary social insurance for 12 consecutive months and have less than 20 years of contributions.
This regulation aims to encourage workers to preserve their contributions for future pension benefits rather than withdrawing them prematurely.
5. Maternity benefits for voluntary social insurance participants
The new law introduces maternity benefits for voluntary social insurance participants. Female workers enrolled in voluntary social insurance who have paid contributions for at least six months within the 12 months before childbirth will receive an allowance of VND 2,000,000 per child. This regulation aims to enhance benefits and encourage participation in voluntary social insurance.
6. Introduction of monthly allowances
The 2024 Social Insurance Law also introduces a monthly allowance scheme for vulnerable workers and those facing difficulties. Eligible beneficiaries include:
- Workers with a work capacity reduction of 81% or more.
- Elderly individuals from low-income households who do not receive pensions.
- Workers engaged in hazardous or dangerous occupations who suffer from occupational accidents and lose their ability to work.
This measure strengthens social welfare by providing stable income support for disadvantaged workers.
Conclusion
The 2024 Social Insurance Law introduces significant changes, expanding participation, increasing benefits, and creating more favorable conditions for employees. Understanding these updates will help both employees and employers proactively comply with and benefit from social insurance policies, ensuring their rights and obligations.
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