Decision No. 02/2003/QD-TTg On the Issuance of Financial Management Regulations for the Vietnam Social Security

Pursuant to …;

Regarding the issuance of financial management regulations for

Vietnam Social Security

_______________

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to Decree No. 12/CP dated January 26, 1995 of the Government on issuing the Charter of Social Insurance;

Pursuant to Decree No. 45/CP dated July 15, 1995 of the Government on issuing the Charter of Social Insurance for officers, professional military personnel, non-commissioned officers, soldiers of the People's Army and the People's Police;

Pursuant to Decree No. 58/1998/NĐ-CP dated August 13, 1998 of the Government on issuing the Charter of Health Insurance;

Pursuant to Decree No. 100/2002/NĐ-CP dated December 6, 2002 of the Government on functions, tasks, powers, responsibilities, and organizational structure of Vietnam Social Security;

At the request of the Minister of Finance.

DECISION:

Article 1. The attached Decision promulgates the Financial Management Regulations for Vietnam Social Security.

Article 2. This Decision takes effect from January 1, 2003, and all previous provisions contrary to this Decision shall be abolished.

Article 3. The Minister of Finance shall be responsible for guiding and supervising the implementation of these Financial Management Regulations issued with this Decision.

Article 4. Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairmen of provincial People's Committees directly under the central government, the Management Board of Vietnam Social Security, and the General Director of Vietnam Social Security shall be responsible for implementing this Decision.

REGULATIONS

FINANCIAL MANAGEMENT FOR VIETNAM SOCIAL SECURITY
(Issued together with Decision No. 02/2003/QĐ-TTg dated January 2, 2003 of the Prime Minister)

Chapter 1:

GENERAL PROVISIONS

Article 1. These regulations apply to financial management activities for the entire Vietnam Social Security system.

Article 2. The Ministry of Finance shall allocate sufficient funds to Vietnam Social Security to pay out to beneficiaries of social insurance benefits before October 1, 1995.

Article 3.

1. The Social Insurance Fund is formed from contributions of social insurance and health insurance participants; contributions of employers; State contributions and support; profits from fund preservation and growth activities, and other lawful sources.

2. The Social Insurance Fund shall be centrally managed, unified, democratic, and transparent throughout the Vietnam Social Security system; it shall be accounted for separately from the state budget and protected by the State.

Article 4. The Social Insurance Fund shall be used to pay out social insurance benefits to beneficiaries after October 1, 1995; to cover health insurance costs for health insurance participants; to manage the administrative apparatus of the Vietnam Social Security system; to invest in basic construction, and other expenses.

Article 5. Funds for constructing material infrastructure of the Vietnam Social Security system shall be allocated from profits generated from fund preservation and growth measures.

Article 6.

1. Annually, Vietnam Social Security shall be responsible for preparing the budget for income and expenditure of the Social Insurance Fund (social insurance, health insurance, management, investment in basic construction, etc.), submit it to the Management Board for approval, and send it to the Ministry of Finance for consolidation and submission to the Government for assignment to Vietnam Social Security.

2. The General Director of Vietnam Social Security shall allocate and assign tasks based on the income and expenditure targets assigned by the Government and the approved budget, following the principle that total income shall not be lower and total expenditure shall not exceed the targets set by the Government.

Settlement of income and expenditure of the Social Insurance Fund shall be carried out in accordance with current State regulations; accounting systems for social insurance shall be issued and implemented by the Ministry of Finance.

Article 7. Payment to beneficiaries of social insurance benefits shall be conducted as follows:

1. Social Security offices at all levels shall be responsible for organizing payments to beneficiaries of social insurance benefits in a timely, full, and accurate manner according to State policies.

2. Payments of social insurance benefits shall be directly made by Social Security offices at all levels or contracted with employing units, medical facilities, and representatives of communes, wards, towns, and must comply with State regulations.

3. Social Security offices at all levels may suspend payments to beneficiaries who have been found guilty of fraudulent behavior, falsifying documents to claim social insurance benefits by authorized State agencies; immediately take measures to recover wrongly paid amounts; inform the beneficiary, employing unit, or local authority where the beneficiary resides to handle according to their jurisdiction; cooperate and transfer files to legal authorities for handling.

Chapter 2:

SOURCES OF FORMATION, USE AND MANAGEMENT OF THE SOCIAL INSURANCE FUND

Article 8. The Social Insurance Fund is formed from the following sources:

1. Employers and employees participating in mandatory social insurance contribute.

2. Employers and employees participating in mandatory and voluntary health insurance contribute.

3. The State contributes and supports to ensure social insurance benefits for employees.

4. The State provides support and pays health insurance for the poor and policy beneficiaries.

5. Profits from implementing measures to preserve and grow the Social Insurance Fund.

6. Other lawful sources.

Article 9. Collection of contributions from participants in insurance programs as stipulated by law shall be carried out as follows:

1. Social Security offices at all levels shall be responsible for guiding and organizing the collection of insurance premiums from all participants in accordance with regulations.

2. Monthly, employing units (including units, agencies, organizations under the Ministry of National Defense, the Ministry of Public Security, and the Government Cryptographic Office) shall promptly deposit into the Social Insurance Fund after paying monthly salaries to employees.

3. In case employers delay social insurance contributions for thirty days or more beyond the prescribed period, they must pay the overdue amount, administrative fines as stipulated by current regulations, and also pay late payment penalties at the interest rate for overdue loans set by the State Bank of Vietnam at the time of collection. For employers who intentionally violate the rules or delay payments, the Social Insurance Agency has the authority to request the Treasury, or the bank where the employer conducts transactions, to deduct funds from the employer's account to cover the full social insurance contributions and late payment penalties without requiring the employer's consent (except for those permitted by the Government or the Prime Minister to delay payments).

4. The Ministry of Finance shall take the lead and coordinate with the Ministry of Labor, Invalids, and Social Affairs, the Ministry of Health, and relevant agencies to specify the contribution rates and periods for social insurance and health insurance for each category of individuals, including policy beneficiaries under current regulations.

Article 10. The Vietnamese Social Insurance System shall open deposit accounts for the Social Insurance Fund at the State Treasury system and state commercial banks. The balance in these deposit accounts shall earn interest at the rates specified by state commercial banks and the State Treasury.

Article 11. The Social Insurance Fund shall be centrally managed within the Vietnamese Social Insurance System, recorded separately, and balanced according to each component fund (the Pension and Allowance Fund; the Compulsory Medical Examination and Treatment Fund; and the Voluntary Medical Examination and Treatment Fund). Each year, if a component fund's total income exceeds its total expenditures, the surplus shall be carried over to the next year; if the total income is less than the total expenditures, other surplus funds may be utilized to ensure timely and full payment of benefits to eligible recipients as prescribed.

After the annual financial settlement report of the entire sector is approved by the Management Council of the Social Insurance, it shall report to the Prime Minister the plan for addressing the budget shortfall of each component fund.

Article 12. The Pension and Allowance Fund.

1. The Pension and Allowance Fund shall be formed from the following sources:

a) Social insurance contributions made by employers and employees.

b) State contributions and support to ensure the implementation of social insurance benefits for employees.

c) Income generated from implementing measures to preserve and grow the Fund.

d) Other lawful revenues.

2. The Pension and Allowance Fund shall be used to pay:

a) Pensions (regular and lump sum).

b) Allowances for workers injured on the job and their caregivers, and provision of equipment for injured workers.

c) Sick leave allowances.

d) Maternity allowances.

đ) Occupational disease allowances.

e) Survivor's benefits (basic and maintenance) and funeral expenses.

g) Rest and recuperation costs.

h) Health insurance contributions as prescribed.

i) Payment fees.

k) Other expenses.

Article 13. The Compulsory Medical Examination and Treatment Fund.

1. The Compulsory Medical Examination and Treatment Fund shall be formed from the following sources:

a) Employers and employees who are required to contribute.

b) State support for policy beneficiaries and revolutionary veterans according to established policies.

c) Income generated from implementing measures to preserve and grow the Fund.

d) Revenue from donations and aid from domestic and foreign organizations and individuals.

đ) Other lawful revenues.

2. The Compulsory Medical Examination and Treatment Fund shall be used to cover the costs of inpatient and outpatient medical examinations and treatments for compulsory health insurance participants, including:

a) Diagnosis and treatment.

b) Laboratory tests, X-rays, and functional examinations.

c) Medications listed in the Ministry of Health's directory.

d) Blood and intravenous fluids.

đ) Surgical procedures and techniques.

e) Use of medical supplies, equipment, and hospital beds.

Article 14. The Voluntary Medical Examination and Treatment Fund.

1. The Voluntary Medical Examination and Treatment Fund shall be formed from the following sources:

a) Contributions from voluntary health insurance participants.

b) State support.

c) Income generated from implementing measures to preserve and grow the Fund.

d) Revenue from donations and aid from domestic and foreign organizations and individuals.

đ) Other lawful revenues.

2. The Voluntary Medical Examination and Treatment Fund shall be used to cover the costs of medical examinations and treatments for participants based on their chosen level of contribution and scope of coverage. Contribution levels and corresponding benefits for medical examinations and treatments are uniformly implemented nationwide.

Chapter 3:

MANAGEMENT AND USE OF FUNDS PROVIDED BY THE STATE BUDGET FOR SOCIAL INSURANCE

Article 15. The Vietnamese Social Insurance shall fully comply with regulations concerning the preparation of budgets, use of funds, and final accounting for social insurance benefits provided by the state budget according to the provisions of the State Budget Law.

Article 16. The state budget shall provide sufficient funds for the payment of social insurance benefits to individuals receiving such benefits before October 1, 1995, including the following items:

1. Pensions.

2. Disability allowances.

3. Allowances for workers injured on the job and their caregivers, and provision of equipment for injured workers.

4. Occupational disease allowances.

5. Rubber plantation worker allowances.

6. Survivor's benefits (basic and maintenance) and funeral expenses.

7. Health insurance contributions as prescribed.

8. Payment fees.

9. Other expenses (if any).

Article 17. Monthly, the Vietnamese Social Insurance shall advance funds from the Pension and Allowance Fund to promptly and fully pay pensions and allowances to individuals supported by the state budget; subsequently, the state budget will reimburse the Pension and Allowance Fund according to actual expenditures in accordance with state policies and regulations.

Chapter 4:

EXPENSES FOR THE MANAGEMENT OF THE VIETNAMESE SOCIAL INSURANCE SYSTEM

Article 18.

1. Expenses for the management and operation of the Vietnamese Social Insurance System:

a) Regular expenses of the Vietnamese Social Insurance System (including research, training, and retraining expenses) serving the operations of the entire sector; excluding major repair costs for fixed assets and purchases funded from approved projects.

b) Annual regular expense funding for the Vietnamese Social Insurance System shall be allocated from the income generated by preserving the Funds, at a rate of 4% of the actual social insurance and health insurance contributions paid by employers and insured participants, applicable from 2003 to 2005.

c) If the Vietnamese Social Insurance completes its tasks and saves on regular management expenses, the surplus shall be used to supplement the following expenses:

- Supplement wages and salaries for workers throughout the industry based on the level of job completion, but the maximum income shall not exceed 2.5 times the wage fund as stipulated currently.

- Allocate wages and salaries for contractual laborers (as prescribed by the Labor Code) when necessary to ensure the completion of work tasks.

- Supplement two reward funds and welfare funds not exceeding three months' average actual salary of the entire industry.

- Provide additional subsidies outside the general policies of the State for workers in the industry who voluntarily resign when implementing personnel restructuring policies. The subsidy amount shall be decided by the General Director of the Vietnam Social Security.

- Establish a Fund for Income Stability Reserve for cadres and civil servants. The contribution rate shall be decided by the General Director of the Vietnam Social Security.

- Any remaining amount after allocating the above five items must be transferred to insurance funds.

2. Contributions and benefits under social insurance and health insurance schemes for cadres and civil servants in the Vietnam Social Insurance sector shall be calculated according to the coefficient of salary levels as prescribed in Decree No. 25/CP dated May 23, 1993 of the Government and the minimum wage set by the Government.

3. Management costs of the Vietnam Social Insurance system shall be decided by the Management Board based on current state standards and the special nature of the industry's operations, ensuring the principle of effective and economical management.

4. The Vietnam Social Security has the responsibility to allocate management costs to social insurance at various levels in accordance with assigned tasks; ensuring that the allocated budget for social insurance at various levels does not exceed the total amount.

Article 19.

1. Annually, based on the management cost allocation as stipulated in point b of Article 18, the Vietnam Social Security shall prepare a management cost budget for the Vietnam Social Insurance system to submit to the Management Board for approval, and send it to the Ministry of Finance for monitoring and supervision.

2. The Vietnam Social Security shall organize the implementation of revenue collection, expenditure, settlement, and financial reporting in accordance with current regulations.

Article 20.

1. Investment and construction funds for physical infrastructure of the Vietnam Social Insurance system shall be extracted from profits generated from implementing preservation and growth measures as stipulated in Clause 3, Article 22 of this Decision.

2. When using investment and construction funds for physical infrastructure of the Vietnam Social Insurance, all current regulations regarding capital investment and basic construction management must be fully implemented.

Chapter 5:

ACTIVITIES FOR PRESERVING VALUE AND GROWTH OF THE SOCIAL INSURANCE FUNDS

Article 21.

1. The Vietnam Social Security is responsible for implementing measures to preserve value and grow the Social Insurance Funds. Temporary idle funds of the Social Insurance Funds used for investment must ensure safety, preserve value, and have economic and social effectiveness.

2. Measures for preserving and growing the Social Insurance Funds include:

- Purchasing Treasury bonds, bills, certificates, and government securities.

- Providing loans to the state budget, the Investment Support Fund, state-owned commercial banks, and policy banks.

- Investing in certain projects requiring capital as decided by the Prime Minister.

Article 22. Annual profits from investments and growth of the Social Insurance Funds shall be allocated and used as follows:

1. Allocating management costs of the Vietnam Social Insurance system as stipulated in point b, Clause 1, Article 18.

2. Establishing two reward and welfare funds equal to three months' average actual salary of the entire industry.

3. Allocating investment and construction funds for physical infrastructure of the entire system according to approved projects by authorized bodies.

4. The remaining portion shall be supplemented into the Social Insurance Funds.

Chapter 6:

IMPLEMENTING PROVISIONS

Article 23. The Minister of Finance is responsible for guiding the implementation of this Regulation.

Article 24. The Management Board of the Vietnam Social Security and the General Director of the Vietnam Social Security are responsible for implementing this Decision.