Circular No. 02/2009/TT-BLDTBXH guiding the adjustment of monthly income already paid for social insurance for voluntary social insurance participants according to Government Decree No. 134/2008/NĐ-CP dated December 31, 2008.

CIRCULAR

GUIDELINES FOR ADJUSTING MONTHLY INCOME ALREADY PAID INTO SOCIAL INSURANCE FOR VOLUNTARY SOCIAL INSURANCE PARTICIPANTS PURSUANT TO DECREE NO. 134/2008/ND-CP OF THE GOVERNMENT ON ADJUSTING MONTHLY INCOME ALREADY PAID INTO SOCIAL INSURANCE FOR VOLUNTARY SOCIAL INSURANCE PARTICIPANTS, EFFECTIVE DECEMBER 31, 2008

Pursuant to Decree No. 134/2008/ND-CP dated December 31, 2008 of the Government on Adjusting Monthly Income Already Paid into Social Insurance for Voluntary Social Insurance Participants (hereinafter referred to as Decree No. 134/2008/ND-CP);
After reaching consensus with the Ministry of Finance, the Ministry of Labor, Invalids and Social Affairs provides guidelines for adjusting monthly income already paid into social insurance for voluntary social insurance participants as follows:

I. APPLICABLE OBJECTS

The objects subject to adjustment of monthly income already paid into social insurance as stipulated in Article 2 of Decree No. 134/2008/ND-CP are workers who have voluntarily joined social insurance from January 1, 2008 onwards and subsequently receive pension or a one-time benefit upon retirement, one-time social insurance benefit, or death benefits for dependents under one of the following circumstances:

1. Workers who have voluntarily joined social insurance but had no prior period of mandatory social insurance contributions.

2. Workers who have voluntarily joined social insurance but had a prior period of mandatory social insurance contributions.

II. ADJUSTMENT OF MONTHLY INCOME ALREADY PAID INTO SOCIAL INSURANCE

1. The level of adjustment of monthly income already paid into social insurance applicable to the objects specified in Section I of this Circular shall be based on the average annual consumer price index as prescribed in Article 3 of Decree No. 134/2008/ND-CP, as follows:

a. For workers who have voluntarily joined social insurance but had no prior period of mandatory social insurance contributions:

a1. Level of Adjustment:

The level of adjustment of monthly income already paid into social insurance for workers who have voluntarily joined social insurance and are entitled to a one-time social insurance benefit or death benefits for dependents from January 1, 2008 to December 31, 2009 is implemented according to Table 1 below:

Table 1:

a2. Adjustment Formula

b. For workers who have voluntarily joined social insurance but had a prior period of mandatory social insurance contributions:

b1. Level of adjustment and adjustment formula for the period of voluntary social insurance contributions as stipulated in Point a of this Clause.

b2. The level of adjustment for the period of social insurance contributions made under the wage system determined by the employer is carried out according to the table below:

Table 2: Applicable to workers who have voluntarily joined social insurance and had a prior period of mandatory social insurance contributions under the wage system determined by the employer and are entitled to pension, one-time social insurance benefit, or death benefits for dependents during the period from January 1, 2008 to December 31, 2008:

Table 3: Applicable to workers who have voluntarily joined social insurance and had a prior period of mandatory social insurance contributions under the wage system determined by the employer and are entitled to pension, one-time social insurance benefit, or death benefits for dependents during the period from January 1, 2009 to December 31, 2009:

2. Adjustment Formula

3. The average monthly income paid into voluntary social insurance or the average monthly wage or income paid into social insurance serving as the basis for calculating pension, one-time benefit upon retirement, one-time social insurance benefit, and death benefits for dependents is calculated according to Article 16 and Article 17 of Decree No. 190/2007/ND-CP dated December 28, 2007 of the Government guiding certain provisions of the Law on Social Insurance regarding voluntary social insurance, wherein the monthly income paid into voluntary social insurance is adjusted according to Clause 2 of Section II.

Example 1: Mr. A has voluntarily joined social insurance from April 2008 to November 2008 (8 months), without having previously participated in mandatory social insurance. The monthly income paid into voluntary social insurance is 1,540,000 VND/month. In December 2008, Mr. A ceased paying social insurance and requested a one-time social insurance benefit. Therefore, Mr. A's one-time benefit is calculated as follows:

- The total monthly income paid into social insurance from April 2008 to November 2009 of Mr. A is adjusted according to the level of adjustment stipulated in Table 1 and calculated according to Table 4 as follows:

Table 4:

In Mr. A's case, since the period of social insurance contributions is less than one year, the one-time social insurance benefit is calculated as follows:

16% x 12,320,000 VND = 1,971,200 VND/month.

Example 2: Mr. B has a total period of social insurance contributions of 20 years, including 19 years and 3 months of mandatory social insurance contributions and 9 months of voluntary social insurance contributions, meeting the conditions to receive a pension from December 2008. The evolution of wages, income, and monthly income paid into social insurance of Mr. B is as follows:

a. From October 1988 to December 2000 (147 months) participating in mandatory social insurance, belonging to the category receiving state-determined wages, the average monthly wage paid into social insurance in the last five years is 1,250,000 VND/month.

b. From January 2001 to December 2007 (84 months) participating in mandatory social insurance, belonging to the category receiving wages or income determined by the employer. The total monthly wages or income paid into social insurance of Mr. B is shown in Column 4 of Table 5a.

The total monthly wages or income paid into social insurance from January 2001 to December 2007 of Mr. B is adjusted according to the level of adjustment stipulated in Table 2 and calculated in Column 6 of Table 5a as follows:

Table 5a:

c. From January 2008 to February 2008, the period of social insurance contribution was suspended.

d. From March 2008 to November 2008 (9 months), voluntary social insurance participation. The total monthly income for voluntary social insurance contributions of Mr. B is shown in column 4 of Table 5b.

The total monthly income for voluntary social insurance contributions from March 2008 to November 2008 of Mr. B is adjusted according to the adjustment level specified in Table 1 and calculated in column 6 of Table 5b as follows:

Table 5b:

e. The average monthly salary, wage, and income for social insurance contributions serving as the basis for calculating retirement pension benefits for Mr. B is calculated as follows:

Where:

+ The average monthly salary, wage for mandatory social insurance contributions is:

+ The total number of months for mandatory social insurance contributions is: 147 months + 84 months = 231 months.

+ The total monthly income for voluntary social insurance contributions is 45,360,000 VND (result after adjustment in column 6).

The average monthly salary, wage, and income for social insurance contributions serving as the basis for calculating retirement pension benefits for Mr. B is:

g. Mr. B is entitled to a retirement pension at a rate of 55%. The monthly retirement pension amount for Mr. B is:

55% x 2,602,925 VND/month = 1,431,609 VND/month.

III. IMPLEMENTATION

1. The Ministry of Labor, Invalids and Social Affairs shall organize guidance and inspection of the implementation in accordance with the provisions of Decree No. 134/2008/NĐ-CP and this Circular.

2. The Vietnam Social Security shall be responsible for implementing the adjustment of monthly income already contributed to voluntary social insurance for workers participating in voluntary social insurance who are entitled to retirement pensions, lump-sum allowances upon retirement, one-time social security, or dependents of workers entitled to one-time survivor allowances as prescribed in Decree No. 134/2008/NĐ-CP and guided in this Circular.

3. The funding for the adjustment of monthly income already contributed to voluntary social insurance for payment of retirement pensions, lump-sum allowances upon retirement, one-time social security, and one-time survivor allowances as prescribed in Decree No. 134/2008/NĐ-CP and guided in this Circular shall be guaranteed by the Social Security Fund.

IV. IMPLEMENTATION PROVISIONS

1. This Circular takes effect 45 days from the date of issuance; the provisions of this Circular apply from January 1, 2008.

2. During the implementation process, if there are any difficulties, please report to the Ministry of Labor, Invalids and Social Affairs for timely research and resolution./.