Joint Circular No. 017-TT/LB guiding the method of deducting and remitting funds to the social insurance fund

CIRCULAR

Guidelines on the method of deducting and remitting funds to the social insurance fund.

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Implementing Article 68 of the temporary charter regarding social insurance benefits for state employees and civil servants, and Articles 2, 4, 5, 6, 7 of Decree No. 39-CP dated March 22, 1962 of the Council of Ministers;

The Ministry of Finance and the Vietnam General Confederation of Labor provide specific guidelines on the deduction and remittance of funds to the social insurance fund as follows:

I. BASIS FOR CALCULATING FUNDS TO BE REMITTED TO THE SOCIAL INSURANCE FUND

According to Article 2 and Article 5 of Decree No. 39/CP dated March 22, 1962 mentioned above, each month, state administrative agencies and mass organizations, enterprises, construction sites, agricultural farms, forestry farms... must remit to the social insurance fund a certain amount of money calculated at 4.7% of the total salary actually paid to workers and staff in that month.

1. The payroll basis for calculating the amount to be remitted to the social insurance fund at the rate of 4.7% mentioned above is the total amount of money that each agency, enterprise... has actually spent to pay salaries to the total number of cadres, workers, and staff within the labor and salary quota approved by the State for administrative agencies, public services (including mass organizations), enterprises, construction sites, agricultural farms, forestry farms in that month, including all expenses for salaries as stipulated by the Council of Ministers in Decree No. 14/CP dated February 1, 1961 regarding the components of the total national salary level.

2. Funds to be remitted to the social insurance fund. Salaries of cadres, workers, and staff within the staffing quota and payroll mentioned above, which are funded from which sources (administrative expenses, public service cultural and social expenses, economic construction public service expenses, self-sufficient business expenses through cost differential subsidies, production business expenses, etc.), the amount remitted to the social insurance fund shall also be funded from those sources.

II. RECORDING AND CHARGING OF SOCIAL INSURANCE EXPENSES IN THE STATE BUDGET OR FINANCIAL PLANS OF AGENCIES AND ENTERPRISES

1. For administrative agencies and public services: (including mass organizations, cultural and social public services and economic construction public services), the amount deducted at the rate of 4.7% for the social insurance fund is allocated from the state budget in the financial plan of those agencies and recorded under Item III "Social Allowance", Sub-item 2 "Amount Deducted at 4.7% for the Social Insurance Fund".

2. For enterprises: The amount remitted at the rate of 4.7% for the social insurance fund is charged by the enterprise and included in the product cost.

3. For basic construction units: The amount remitted at the rate of 4.7% for the social insurance fund is included in the social costs (indirect costs) of the construction budget.

4. For dining halls and kindergartens:

- Dining halls remit to the social insurance fund 4.7% based on the actual payroll paid to the canteen staff and personnel. The 4.7% amount remitted to the social insurance fund is covered from the revenue of the dining hall, including the subsidy from the agency or enterprise (1đ80 per person) and the 5% revenue from the actual meal cost of cadres, workers, and staff.

- Kindergartens remit to the social insurance fund 4.7% based on the actual payroll paid to kindergarten caregivers. The 4.7% amount remitted to the social insurance fund is recorded in the kindergarten's budget.

5. For schools:

a) Cadres, workers, and staff of the school:

The deduction and remittance to the social insurance fund at 4.7% based on the actual payroll of cadres, workers, and staff within the school's staffing quota and salary, shall be carried out according to the prescribed method.

b) Students and trainees who are cadres, workers, and staff sent to study and have been removed from their original staffing quota, receiving subsistence allowances at a percentage of their salary provided by the school:

The school must remit to the social insurance fund 4.7% based on the total amount of the allowance given as a percentage of the salary to students and trainees who are cadres and workers sent to study. This 4.7% amount is covered by the school scholarship fund and recorded in a separate item for easy tracking.

c) Cadres sent to study cultural, political, and vocational courses still belong to the staffing quota of the agency, enterprise... and still receive full salary or a percentage of the salary from the agency, enterprise...:

The agency paying the salary must remit to the social insurance fund 4.7% based on the total actual salary paid to these cadres and workers and must send the entire salary to the school for the school to pay the salary and social insurance benefits to these cadres and workers in case of illness, childbirth... Regarding the settlement between the school and the agencies, enterprises will be regulated later.

III. TIME FOR REMITTING FUNDS TO THE SOCIAL INSURANCE FUND

1. Since the basis for calculating the amount to be remitted to the social insurance fund is the actual monthly payroll expenditure of the agency, enterprise... the time uniformly specified for agencies to remit money to the social insurance fund is from the 1st to the 5th day of the following month (i.e., after the previous month's salary has been settled).

Example: On April 1, 2, 3, 4, and 5, 1962, agencies and enterprises remit to the Federation of Trade Unions the amount to be remitted to the social insurance fund for March 1962.

2. For December each year, to ensure the remittance of funds to the social insurance fund and the settlement of social insurance expenses for the year in that year, if there are any salary or social insurance expenses for December that have not been settled by December 31 and need to be carried over to January of the following year, these expenses shall be counted as part of the actual payroll expenditure or temporary advance for social insurance of December of that year. However, the time for remitting funds to the social insurance fund for December shall not be extended beyond January 15 of the following year.

IV. METHOD OF CALCULATING FUNDS TO BE REMITTED TO THE SOCIAL INSURANCE FUND

1. For agencies and enterprises currently paying salaries to cadres, workers, and staff. After a single payment at the end of the month or two payments:

a) At the end of each month, multiply the total amount actually paid to cadres, workers, and staff by 4.7% to determine the amount of funds to be remitted to the social insurance fund.

b) Subtract the amount of funds to be remitted to the social insurance fund from the total amount already advanced for the social insurance fund to determine whether the social insurance fund has a surplus or shortage to settle with the General Confederation of Labor or the Federation of Trade Unions authorized by the General Confederation of Labor.

Example:

- Total salary actually paid in the month is 5,260đ

The amount to be paid into the social insurance fund is:

5,260đ x 4.7/100 = 247đ22

The total amount of advance payments for social insurance is 200đ.

The remaining amount to be paid into the General Confederation of Trade Unions or the Federation of Trade Unions (social insurance fund account) is:

247đ22 – 200đ = 47đ22

2. For agencies and enterprises currently paying salaries to officials, workers, and staff before the labor period of one or two periods:

The method of calculating the amount to be paid into the social insurance fund is as follows:

a) In the first salary period of the month, the agency or enterprise still pays officials, workers, and staff 60% of their salary and 40% in the middle of the month as usual, because it is not yet known which officials, workers, and staff will be sick and transferred to the social insurance fund at 4.7% of the total salary paid in two periods.

b) At the end of the month, when the number of sick days of officials, workers, and staff is clear, the agency or enterprise calculates the salary for those sick days and deducts it from the next month's salary.

Example:

In February 1962, the total salary paid in advance was 5,260đ

The amount to be paid into the social insurance fund is:

5,260đ x 4.7% = 247đ22

By the end of February 1962, the agency knew that there were 2 sick officials:

1. Mr. A with a monthly salary of 56đ, sick for 5 days

2. Mr. B with a monthly salary of 73đ, sick for 7 days

The amount to be deducted gradually from March 1962 salary is:

Mr. A: 5 days: 56đ x 5/26 = 10đ75

The actual expenditure on the salary fund in March 1962 will be:

5,260đ – 30đ35 = 5,229đ65

The amount to be paid into the social insurance fund in March 1962 is: 5,229đ65 x 4.7% = 245đ80

By the end of March 1962, when the number of sick officials, workers, and staff is clear, calculate the salary for those sick days to be deducted from April 1962...

Specifically, in December 1962, the advance salary for sick days in December 1962 must be recovered to reduce the salary fund expenditure in December 1962 during the adjustment and settlement period of December 1962.

Example: In December 1962, the total salary advanced for two periods for officials was: 5,370đ

In November 1962, three officials were sick:

- Mr. X: sick for 5 days, salary 56đ

- Mr. Y: sick for 4 days, salary 50đ

- Mr. Z: sick for 2 days, salary 73đ

The amount to be deducted gradually from December 1962 salary is:

Mr. X: 5 days: 56đ x 5/26 = 10đ75

Mr. Y: 4 days: 50đ x 4/26 = 7đ69

Mr. Z: 2 days: 73đ x 2/26 = 5đ44

Total: 23đ88

By the end of December 1962, it was known that one official was sick for 20 days in December, with a salary of 73đ, the amount to be deducted from December 1962 salary is:

73đ x 20/26 = 56đ15

The actual expenditure on the salary fund in December will be:

5,370đ – (23đ88 + 56đ15) = 5,289đ97

B. TEMPORARY ADVANCE AND SETTLEMENT OF TEMPORARY ADVANCES FOR THE SOCIAL INSURANCE FUND

1. From the beginning to the end of the month, if the social insurance fund needs to pay sickness benefits, maternity benefits, termination benefits due to loss of working capacity, retirement benefits, funeral expenses, childbirth benefits... the agency or enterprise will temporarily advance the necessary amount within the budget limit.

At the end of the month, after calculating and knowing the amount the agency or enterprise must pay to the social insurance fund for that month, the social insurance fund must immediately settle the amount temporarily advanced by the agency or enterprise.

If the amount to be paid to the social insurance fund exceeds the amount temporarily advanced, the agency or enterprise must pay the remaining amount to the social insurance fund. If the amount to be paid to the social insurance fund is less than the amount temporarily advanced, the Social Insurance Board of the agency or enterprise reports to the General Confederation of Trade Unions or the Federation of Trade Unions to return the excess amount to the agency or enterprise, settling it definitively in the same month.

Example:

1. The amount to be paid into the social insurance fund for February 1962 is 247đ22. During February 1962, the agency temporarily advanced to the social insurance fund for benefits: - Mrs. C maternity leave: 10đ - Mr. D one month's salary for termination due to loss of working capacity: 73đ. Therefore, the amount to be paid to the General Confederation of Trade Unions or the Federation of Trade Unions is:

247đ22 – (10đ + 73đ) = 164đ22

Sickness benefits for February 1962, which are deducted from the salary fund in March 1962, will also be settled with the social insurance fund in March 1962.

2. In March 1962: The total salary after deducting the salary advanced by the agency for the sick days of Mr. A and Mr. B in February 1962 (30đ35) remains:

5,260đ – 30đ35 = 5,229đ65

The amount to be paid into the social insurance fund for March 1962 is:

5,229đ65 x 4.7% = 245đ80

The amount the agency temporarily advanced to the social insurance fund for benefits for Mr. A and Mr. B for sick days in February 1962 is:

Mr. A: 80% of salary for 5 sick days

56đ x 5 x 80/26 x 100 = 8đ60

Mr. B: 90% of salary for 7 sick days

73đ x 7 x 90/26 x 100 = 17đ64

Total: 26đ24

In March 1962, the agency again temporarily advanced to the social insurance fund:

To pay Mrs. C maternity leave: 10đ

To pay some retired officials: 230đ

The settlement with the social insurance fund is as follows:

The amount to be paid into the social insurance fund is: 245đ80

The amount temporarily advanced to the social insurance fund is: 26đ24 + 10đ + 230đ = 266đ24. The Federation of Trade Unions must refund the agency:

266đ24 – 245đ80 = 20đ44

Thus, in February 1962, after paying 164đ22 into the account of the Federation of Trade Unions authorized by the General Confederation of Trade Unions, and in March 1962, after receiving a refund of 20đ44 from the Federation of Trade Unions, the settlement of funds between the agency, enterprise, and the social insurance fund is complete.

As for officials, workers, and staff who were sick like Mr. A, B, X... and received 100% of their salary during non-working days, they must repay the agency or enterprise the difference between their salary and social benefit the following month. Specifically:

During the 5 sick days, Mr. A only received 80% of his salary as social insurance benefit:

56đ x 5 x 80/26 x 100 = 8đ60

But Mr. A had already received the full 5 days' salary in advance:

56đ x 6/26 = 10đ75

So he must repay the agency:

10đ75 – 8đ00 = 2đ15

During the 7 sick days, Mr. B only received social insurance benefit:

73đ x 7 x 90/26 = 17đ64

However, he had already received seven days' salary in advance:

73đ x 7 /100 = 19đ60

Therefore, he must repay the agency the following month:

19đ60 – 17đ64 = 1đ96

The amount to be repaid to the agency or enterprise as mentioned above shall be deducted directly from his salary for the following month.

2. For administrative and public service agencies, apart from the allocated budget, there are no other funds available. Thus, if an agency has exhausted its budget allocation but still lacks funds in the social insurance fund to cover regular or emergency expenses in that month, the agency's social insurance board shall prepare a forecast and request the Federation of Trade Unions or the General Confederation of Labor to allocate additional funds.

3. In cases of genuine necessity, if the social insurance fund of the Federation of Trade Unions or the General Confederation of Labor also lacks funds to provide for the agency social insurance boards, the Federation of Trade Unions and the General Confederation of Labor may propose to the financial authority to temporarily advance the necessary funds.

By the end of the month, the Federation of Trade Unions and the General Confederation of Labor must settle and repay the financial authority the amount borrowed.

VI. MANAGEMENT OF THE SOCIAL INSURANCE FUND AT AGENCY, ENTERPRISE, WORK SITE, AGRICULTURAL SITE, FOREST SITE

1. According to Articles 67 and 70 of the Interim Regulations on Social Insurance Benefits, the Vietnam General Confederation of Labor is responsible for managing the social insurance fund and the entire social insurance affairs of state cadres, workers, and civil servants. The social insurance board at each agency, enterprise, work site, agricultural site, and forest site is responsible for urging contributions to the social insurance fund, deciding on the disbursement of social insurance benefits according to established regulations, and inspecting the collection and expenditure of social insurance funds. Financial, personnel, labor statistics, and payroll departments within these agencies and enterprises are responsible for supporting the management of the social insurance fund by the grassroots trade union and the heads of these units are responsible for directing and urging these departments to perform their duties well.

2. Based on the provisions above, from now on, the financial departments (or accounting, management departments) of agencies, enterprises, work sites, agricultural sites, and forest sites have the responsibility to strictly comply with the management system for collecting and disbursing the social insurance fund and the accounting, reporting, etc., systems regarding the social insurance fund as stipulated by the Vietnam General Confederation of Labor.

3. Financial authorities at all levels are responsible for monitoring and supervising the contribution of funds to the social insurance fund at the prescribed ratio and basis (4.7% of actual payroll expenditures).

VII. REPORTING ON THE COLLECTION AND EXPENDITURE OF THE SOCIAL INSURANCE FUND

Each month, the social insurance boards at agencies, enterprises, etc., together with the financial departments (accounting, management departments) of these agencies and enterprises, are responsible for preparing reports on the situation of collection and expenditure and the management plan for the social insurance fund at their respective units and submitting them to the higher-level Federation of Trade Unions (which has been entrusted by the General Confederation of Labor to manage the social insurance fund directly).

VIII. SUMMARY OF THE COLLECTION AND EXPENDITURE AND MANAGEMENT PLAN FOR THE SOCIAL INSURANCE FUND IN THE FIRST AND SECOND QUARTERS OF 1962

During this period, due to the lack of specific regulations on the method of contributing funds to the social insurance fund, agencies and enterprises temporarily advanced funds to cover various social insurance benefits for cadres, workers, and civil servants.

To settle the specific and final amounts advanced by agencies and enterprises for the social insurance fund and the amounts they need to contribute to the social insurance fund in the first and second quarters of 1962, agencies and enterprises should immediately conduct a summary of the collection and expenditure of the social insurance fund in the first and second quarters according to the following guidelines:

a) For agencies that have completed the summary of the collection and expenditure of the social insurance fund for the first quarter:

- They should review the contributions, and if there are any discrepancies with the provisions in this document, they should adjust the figures to ensure accuracy.

- Promptly proceed with the summary of the collection and expenditure of the social insurance fund for the second quarter of 1962.

b) For agencies and enterprises that have not yet completed the summary of the collection and expenditure of the social insurance fund, they should promptly prepare a report on the collection and expenditure of the social insurance fund for the first quarter of 1962 and submit it to the Federation of Trade Unions, while continuing to prepare a report on the collection and expenditure of the social insurance fund for the second quarter of 1962.

c) Report Template: The summary report on the collection and expenditure of the social insurance fund for the first and second quarters of 1962 must be prepared according to a unified template provided by the General Confederation of Labor and submitted to the Federation of Trade Unions for consolidation and submission to the General Confederation of Labor.

d) Deadline for Reporting:

- Summary of the First Quarter of 1962:

By June 20, 1962, all agencies, enterprises, work sites, agricultural sites, and forest sites must complete the summary of the first quarter of 1962 and submit the report to the Federation of Trade Unions of the region, province, city, and vertical industry trade unions.

By June 30, 1962, the Federation of Trade Unions of the region, province, city, and vertical industry trade unions must consolidate the report of the first quarter of 1962 and submit it to the General Confederation of Labor of Vietnam.

- Summary of the Second Quarter of 1962:

By July 15, 1962, all agencies, enterprises, work sites, agricultural sites, and forest sites must submit the report on the collection and expenditure of the social insurance fund for the second quarter of 1962 to the Federation of Trade Unions of the region, province, city, and vertical industry trade unions.

By July 30, 1962, the Federation of Trade Unions of the region, province, city, and vertical industry trade unions must consolidate the report of the second quarter of 1962 and submit it to the General Confederation of Labor of Vietnam.

e) Specific Provisions Regarding the Settlement of the Collection and Expenditure of the Social Insurance Fund for the First and Second Quarters of 1962:

a) According to the principle of the Interim Regulations on Social Insurance Benefits which took effect from January 1, 1962.

b) Agencies and enterprises that have not yet disseminated the regulations and policies on social insurance to cadres, workers, and civil servants may postpone the sick leave benefit for one month, but starting from February 1, 1962, the entire social insurance system must be implemented.

c) According to the detailed calculation of the Ministry of Finance, Ministry of Labor, and Ministry of Home Affairs, and the General Confederation of Labor, in the ratio of 4.7% of actual payroll expenditures contributed to the social insurance fund, the amount for sick leave benefits for cadres, workers, and civil servants accounts for 2.8%. Therefore:

- As of January 1962, where all social insurance regimes (including sickness benefit paid from the social insurance fund) have been fully implemented since January 1, 1962, such places must contribute to the social insurance fund at a rate of 4.7% based on the actual expenditure of the January 1962 salary fund and settle according to actual expenditures.

- In January 1962, where salaries for cadres, workers, and staff members who were absent due to illness continue to be paid from the salary fund, only a contribution of 1.9% (4.7% - 2.8%) based on the actual expenditure of the January 1962 salary fund must be made to the social insurance fund.

- In January 1962, where sickness benefits for cadres, workers, and staff members who were absent due to illness have been paid from the social insurance fund starting from January 16, 1962, a contribution of 3.3% (4.7% - 1.4%) based on the actual expenditure of the January 1962 salary fund must be made to the social insurance fund.

- For subsequent months from February, March, April, May, June... all agencies and enterprises must contribute monthly to the social insurance fund at a rate of 4.7% based on the actual expenditure of the monthly wage fund. Agencies and enterprises that have not yet implemented the social insurance regime for sickness benefits and still pay 100% of the salary for days off due to illness up until February 1, 1962, must adjust their implementation from February 1, 1962, and contribute to the social insurance fund at a rate of 4.7% based on the actual expenditure of the monthly wage fund.

The amount of salary already paid to sick cadres, workers, and staff members must be adjusted according to the sickness benefit regulations stipulated in Article 7 of Chapter II of the Social Insurance Charter. The difference in amount must be refunded to the salary fund.

However, to consider the difficult family circumstances of some sick cadres, workers, and staff members, agencies and enterprises may cooperate with the Trade Union to examine each case specifically and resolve the refund issue by gradually deducting it from the monthly salary, but this cannot exceed three months.

During the implementation process, if any difficulties or obstacles arise, they should be reported to the Ministry of Finance and the General Confederation of Labor for research and resolution measures.