Legal News

[Labor] Lump-Sum Social Insurance Benefit System in the Draft Amendment to the Social Insurance Law

2024/05/30

At the 7th session of the Diet on May 27, the contents of the draft amendment to the Social Insurance Law continued to be discussed.
Noteworthy is the condition for applying to receive the Social Insurance Lump-sum Payment for “those who have not reached pensionable age, have not continuously paid social insurance premiums, and have paid social insurance for less than 20 years. Specifically, the government has proposed the following two options to the Diet.

◆ Option 1: Those who were enrolled in social insurance before the amended Social Insurance Law took effect and have not enrolled in compulsory or voluntary social insurance for 12 months after withdrawal and have paid social insurance for less than 20 years may apply for the benefit only once.

◆ Option 2: Those who have not enrolled in compulsory or voluntary social insurance after 12 months of withdrawal and have paid social insurance for less than 20 years may apply for benefits once, provided that the total period paid for retirement pension and survivors’ benefits does not exceed 50% of the total period paid for retirement pension and survivors’ benefits.

Currently, the majority of opinions support Option 1. If Option 1 is approved, the Vietnamese government would restrict workers from applying for lump-sum social insurance benefits. This means that, except for exceptions stipulated by law, workers who join social insurance after the amended Law on Social Insurance comes into effect will not be able to apply for lump-sum social insurance benefits. This draft is in the process of gathering input for completion and is expected to be approved on June 25, with an effective date of July 1, 2025.
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