Circular No. 03/2007/TT-BLDTBXH guiding the implementation of certain provisions of Government Decree No. 152/2006/NĐ-CP dated December 22, 2006 guiding certain provisions of the Social Insurance Law on mandatory social insurance.

CIRCULAR

Guidelines for Implementing Certain Provisions of Decree No. 152/2006/NĐ-CP

dated December 22, 2006, guiding certain provisions of the Social Insurance Law on mandatory social insurance

Guidelines for Implementing Certain Provisions of Decree No. 152/2006/NĐ-CP dated December 22, 2006, guiding certain provisions of the Social Insurance Law on mandatory social insurance

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Pursuant to Decree No. 152/2006/NĐ-CP dated December 22, 2006, guiding certain provisions of the Social Insurance Law on mandatory social insurance (hereinafter referred to as Decree No. 152/2006/NĐ-CP), the Ministry of Labor, Invalids and Social Affairs guides the implementation of certain provisions of the Decree as follows.

A. APPLICABLE OBJECTS

1. Civil servants, public officials, civil servants, and workers employed under labor contracts participating in mandatory social insurance as stipulated in Article 2 of Decree No. 152/2006/NĐ-CP include:

a) Civil servants and public officials as prescribed by laws on civil servants and public officials;

b) Workers employed under fixed-term labor contracts of at least three months and indefinite-term labor contracts as prescribed by laws on labor;

c) Workers, cooperative members, including management personnel working and receiving wages under labor contracts of at least three months in cooperatives and cooperative unions established and operating under the Law on Cooperatives;

d) National defense workers and police workers working in enterprises belonging to the armed forces;

đ) Workers specified in points a, b, c, and point d of this clause who are sent to study, intern, or work domestically or abroad while still receiving salaries or wages domestically;

e) Workers who have participated in mandatory social insurance but have not yet received a lump-sum social insurance benefit before going to work abroad for a fixed term according to the laws on Vietnamese workers going to work abroad under contracts, including the following types of contracts:

- Contracts with organizations and enterprises permitted to operate services sending workers to work abroad, enterprises sending workers to work abroad in the form of internships and skill enhancement, and enterprises investing abroad that send workers to work abroad;

- Contracts with Vietnamese enterprises undertaking and winning bids for projects abroad;

- Individual contracts.

The applicable objects of mandatory social insurance mentioned in this clause shall be collectively referred to as workers. For workers going to work abroad under contracts as specified in point e of this clause, only retirement and death benefits will be implemented, excluding workers working under contracts with Vietnamese enterprises undertaking and winning bids for projects abroad.

2. Employers participating in mandatory social insurance as stipulated in Article 3 of Decree No. 152/2006/NĐ-CP include:

a) Enterprises established and operating under the Enterprise Law;

b) State-owned companies established under the Law on State-Owned Enterprises during the period of transitioning to Limited Liability Companies or Joint Stock Companies under the Enterprise Law;

c) State agencies, state-run public institutions;

d) Political organizations, political-social organizations, political-social-professional organizations, social-professional organizations, other social organizations;

đ) Organizations and units operating in accordance with the law;

e) Non-state institutions operating in education-training; health; culture; sports; science and technology; environment; social welfare; population, family, child protection and care, and other public service sectors;

g) Cooperatives and Cooperative Unions established and operating under the Law on Cooperatives;

h) Individual business households, cooperative groups, other organizations, and individuals hiring workers according to the labor law;

i) Foreign agencies, organizations, and international organizations operating in Vietnam using Vietnamese workers, except where international treaties to which the Socialist Republic of Vietnam is a party provide otherwise.

B. SOCIAL INSURANCE REGIMES

I- SICKNESS REGIME

1. The level of sickness benefit according to the time stipulated in Articles 9 and 10 of Decree No. 152/2006/NĐ-CP is calculated as follows:

 

- The number of days off entitled to sickness benefit is calculated based on working days, excluding holidays, Tet holidays, and weekly rest days.

2. The level of sickness benefit for workers suffering from long-term treatable diseases is calculated as follows:

 

Where:

- Benefit ratio:

+ 75% up to a maximum of 180 days in a year;

+ 65% if the worker continues treatment beyond 180 days in a year and has contributed to social insurance for at least 30 years;

+ 55% if the worker continues treatment beyond 180 days in a year and has contributed to social insurance for at least 15 years but less than 30 years;

+ 45% if the worker continues treatment beyond 180 days in a year and has contributed to social insurance for less than 15 years.

- The number of days off entitled to sickness benefit includes holidays, Tet holidays, and weekly rest days.

- If a worker suffers from a long-term treatable disease and continues treatment beyond 180 days, and the level of sickness benefit in a month is lower than the minimum wage, it shall be calculated at the minimum wage.

3. When a worker takes more than 14 working days off in a month to enjoy sickness benefits, neither the worker nor the employer needs to pay social insurance for that month. This period does not count towards the period of social insurance contributions.

II- MATERNITY REGIME

1. Conditions for enjoying maternity benefits as stipulated in Clause 1 of Article 14 of Decree No. 152/2006/NĐ-CP are guided as follows:

Female workers giving birth and workers adopting children under four months old must contribute to social insurance for at least six months within the twelve months prior to childbirth or adoption.

In cases where childbirth or adoption occurs before the 15th day of the month, the month of childbirth or adoption is not counted in the twelve months prior to childbirth or adoption.

In the case where a child is born or adopted from the 15th day onwards of a month, then the month of birth or adoption of the child shall be counted within the 12-month period before the birth or adoption of the child.

Example 1: Ms. A gave birth on January 13, 2007, the 12-month period before giving birth is calculated from January 2006 to December 2006. If Ms. A has paid social insurance for at least six months during this period, she will be entitled to maternity benefits according to the regulations.

Example 2: Ms. B stopped working in August 2007 and gave birth on December 16, 2007. The 12-month period before giving birth is calculated from January 2007 to December 2007. If Ms. B has paid social insurance for at least six months during this period, she will be entitled to maternity benefits according to the regulations.

2. Female workers are entitled to a five-month leave when giving birth as stipulated in point b, Clause 1, Article 15 of Decree No. 152/2006/NĐ-CP, which applies even in cases involving particularly arduous, hazardous, or dangerous jobs.

3. In the event that the mother dies after giving birth, the father or the person directly raising the child shall enjoy maternity benefits as stipulated in Clause 3, Article 15 of Decree No. 152/2006/NĐ-CP, as follows:

a) In the case where only the mother participates in social insurance, the father or the person directly raising the child shall enjoy maternity benefits until the child reaches four months old. The level of maternity benefits shall be based on the average monthly salary or wage of the six consecutive months immediately preceding the cessation of work of the mother.

b) In the case where both parents participate in social insurance or only the father participates in social insurance, the father who stops working to care for the child shall enjoy maternity benefits until the child reaches four months old. The level of maternity benefits shall be based on the average monthly salary or wage of the six consecutive months immediately preceding the cessation of work of the father.

4. The average monthly salary or wage paid for social insurance as the basis for enjoying maternity benefits as stipulated in Article 16 of Decree No. 152/2006/NĐ-CP is explained as follows:

The average monthly salary or wage paid for social insurance as the basis for enjoying maternity benefits is the average monthly salary or wage of the six consecutive months immediately preceding the cessation of work. If the period of social insurance contributions is not continuous, it shall be accumulated.

Example 3: Ms. C gave birth on February 5, 2007, with the following history of social insurance contributions:

- From August 2006 to September 2006 (2 months), social insurance was paid with a monthly salary of 900,000 VND;

- From October 2006 to January 2007 (4 months), social insurance was paid with a monthly salary of 1,200,000 VND.

The average monthly salary paid for social insurance of the six consecutive months immediately preceding the cessation of work of Ms. C is calculated as follows:

 

Therefore, the average monthly salary paid for social insurance of the six consecutive months immediately preceding the cessation of work of Ms. C is 1,100,000 VND/month.

In the case where a worker has contributed to social insurance for less than six months, the level of maternity benefits when going for prenatal checkups, miscarriage, abortion, or stillbirth, or implementing contraceptive measures shall be based on the average monthly salary or wage of the months during which social insurance was paid.

In the case where a worker enjoys maternity benefits when going for prenatal checkups, miscarriage, abortion, or stillbirth, or implementing contraceptive measures in the first month of participating in social insurance, the monthly salary or wage paid for social insurance in that month shall be taken as the basis for calculating the benefits.

Example 4: Ms. D began participating in social insurance in May 2007 and had an intrauterine device inserted on May 21, 2007, with a monthly salary of 1,500,000 VND in May 2007. Ms. D shall take the monthly salary of May 2007 (1,500,000 VND) as the basis for calculating the maternity benefits when inserting the intrauterine device.

5. The level of maternity benefits is stipulated as follows:

a) The level of maternity benefits when taking leave for prenatal checkups, miscarriage, abortion, or stillbirth, or implementing contraceptive measures is calculated according to the following formula:

 

Where:

- The average monthly salary or wage paid for social insurance of the six consecutive months immediately preceding the cessation of work is calculated as specified in Clause 4 of this Section.

- The number of days of leave under the maternity benefit scheme includes holidays, Tet holidays, and weekly rest days. However, the time off for prenatal checkups is calculated based on working days excluding holidays, Tet holidays, and weekly rest days.

b) The level of maternity benefits when taking leave for childbirth or adoption is calculated according to the following formula:

 

6. During the period when female workers are on leave to enjoy maternity benefits without receiving monthly salary or wages, the worker and employer do not have to pay social insurance. This period counts towards the period of social insurance contribution.

III- WORK INJURY AND OCCUPATIONAL DISEASE BENEFITS

1. Conditions for enjoying work injury benefits as stipulated in Clauses 1, 2, and Clause 3, Article 19 of Decree No. 152/2006/NĐ-CP are explained as follows:

a) Suffering an accident at the workplace and during working hours including:

- Accidents occurring during labor closely related to assigned tasks or duties;

- Accidents during breaks between shifts due to personal needs such as menstruation hygiene, bathing, breastfeeding, and using the restroom, as regulated by rules and regulations;

- Accidents during rest breaks, lunch breaks, supplementary meal breaks, and preparation and completion times for work.

b) Suffering an accident outside the workplace or outside working hours while performing tasks at the request of the employer, provided that these tasks are closely related to assigned work or duties.

c) Suffering an accident on the route from their residence to their workplace within the time and route that the employee regularly travels daily between their residence and workplace.

2. The one-time allowance prescribed in Clause 2 Article 21 Decree No. 152/2006/NĐ-CP shall be calculated according to the following formula:

 

Where:

-_{Maximum Downhill Gradient} : general minimum wage level.

- m : degree of reduced work capacity due to occupational accidents or occupational diseases (absolute value 5 ≤ m ≤ 30).

- L : the amount of salary or wages paid for social insurance in the month immediately preceding the cessation of work for treatment. In case the employee suffers an occupational accident in the first month of participating in social insurance, it shall be equal to the amount of salary or wages paid for social insurance in that very month.

- t : number of years of social insurance contributions. One year is counted as 12 months, excluding the first year of social insurance contribution.

Example 1: Mr. D suffered an occupational accident in August 2007. After stable treatment at the hospital, Mr. D was assessed to have a degree of reduced work capacity of 20%. Mr. D has 10 years of social insurance contributions, with the salary level for social insurance in July 2007 being 1,200,000 VND. Mr. D is entitled to a one-time occupational accident allowance, which is calculated as follows:

 

 

The one-time allowance of Mr. D is:

5,625,000 VND + 3,840,000 VND = 9,465,000 VND

3. The monthly allowance prescribed in Clause 2 Article 22 Decree No. 152/2006/NĐ-CP shall be calculated according to the following formula:

 

 

Where:

-_{Maximum Downhill Gradient} : general minimum wage level.

- m : degree of reduced work capacity due to occupational accidents or occupational diseases (absolute value 31 ≤ m ≤ 100).

- L : the amount of salary or wages paid for social insurance in the month immediately preceding the cessation of work for treatment. In case the employee suffers an occupational accident in the first month of participating in social insurance, it shall be equal to the amount of salary or wages paid for social insurance in that very month.

- t : number of years of social insurance contributions. One year is counted as 12 months, excluding the first year of social insurance contribution.

Example 2: Mr. E had a traffic accident while going to a meeting in May 2007. After stable treatment at the hospital, Mr. E was assessed to have a degree of reduced work capacity of 40%. Mr. E has 12 years of social insurance contributions, with the salary level for social insurance in April 2007 being 1,400,000 VND. Mr. E is entitled to a monthly occupational accident allowance, which is calculated as follows:

 

 

The monthly allowance of Mr. E is:

216,000 VND/month + 53,200 VND/month = 269,200 VND/month

4. The time of entitlement to occupational accident and occupational disease allowances for employees undergoing inpatient treatment shall be calculated from the month they complete treatment and are discharged from the hospital.

In cases where employees do not undergo inpatient treatment, the time of entitlement to allowances shall be calculated from the month when the Medical Examination Board issues its conclusion.

IV- RETIREMENT REGIME

1. Coal mining work in underground mines as stipulated in Clause 3 Article 26 Decree No. 152/2006/NĐ-CP includes:

- Coal extraction;

- Transport of coal, soil, and rock;

- Operation of drilling machines;

- Blasting;

- Tunnel excavation for coal extraction.

2. Employees infected with HIV/AIDS due to occupational risks and who have contributed at least 20 years to social insurance, and are entitled to retirement benefits as stipulated in Clause 4 Article 26 Decree No. 152/2006/NĐ-CP include the following categories:

- Civil servants, public officials, and employees working in health care facilities, traditional medicine establishments, and armed forces units, medical establishments established under Article 26 Ordinance No. 44/2002/PL-UBTVQH10 dated July 2, 2002 of the Standing Committee of the National Assembly on administrative violations or drug rehabilitation centers;

- Civil servants and public officials who are members of drug rehabilitation teams as stipulated in Article 13 Decree No. 56/2002/NĐ-CP dated May 15, 2002 of the Government on organizing drug rehabilitation at home and in communities;

- Civil servants and public officials specializing in preventing and combating social evils.

3. The monthly pension level and one-time allowance upon retirement as stipulated in Article 28 Decree No. 152/2006/NĐ-CP are guided as follows:

a) The percentage of monthly pension received is calculated at 45% corresponding to 15 years of social insurance contributions, and then an additional 2% for men and 3% for women for each additional year of social insurance contributions; the maximum rate is 75%.

Example 1: Mr. G retires at age 60 with 20 years and 7 months of social insurance contributions. The percentage of his monthly pension is calculated as follows:

- Mr. G's total years of social insurance contributions are 20 years and 7 months, with the remaining 7 months counted as 1 year, so the total years of social insurance contributions for calculating his pension is 21 years.

- The first 15 years are calculated at 45%;

- From the 16th to the 21st year, which is 6 years, an additional 6 x 2% = 12% is added;

- Mr. G's percentage of monthly pension is: 45% + 12% = 57%.

Example 2: Mr. H retires at age 60 with 35 years of social insurance contributions. His percentage of monthly pension is calculated as follows:

- The first 15 years are calculated at 45%;

- From the 16th to the 35th year, which is 20 years, an additional 20 x 2% = 40% is added;

- The total of the two percentages is: 45% + 40% = 85%;

Mr. H's percentage of monthly pension is capped at 75%.

Example 3: Ms. K retires at age 55 with 20 years and 5 months of social insurance contributions. Her percentage of monthly pension is calculated as follows:

- Ms. K's total years of social insurance contributions are 20 years and 5 months, with the remaining 5 months counted as 0.5 years, so the total years of social insurance contributions for calculating her pension is 20.5 years.

- The first 15 years are calculated at 45%;

- From the 16th to the 20.5th year, which is 5.5 years, an additional 5.5 x 3% = 16.5% is added;

- Ms. K's percentage of monthly pension is: 45% + 16.5% = 61.5%.

Example 4: Ms. L retires at age 55 with 30 years of social insurance contributions. Her percentage of monthly pension is calculated as follows:

- The first 15 years are calculated at 45%;

- From the 16th to the 30th year, which is 15 years, an additional 15 x 3% = 45% is added;

- The total of the two percentages is: 45% + 45% = 90%;

Ms. L's percentage of monthly pension is capped at 75%.

b) The level of monthly pension as stipulated in Clause 2 Article 28 Decree No. 152/2006/NĐ-CP is guided as follows:

- The monthly pension benefit ratio for persons retiring before the retirement age shall be calculated as prescribed in point a of this clause. However, for each year retired early, the pension benefit ratio decreases by 1%. In cases where the retirement age includes fractional years, it shall be rounded up to the next whole year.

- For persons retiring under Clause 1, Article 27 of Decree No. 152/2006/NĐ-CP, the age mark of 60 for males and 55 for females shall be used to calculate the number of years retired early as prescribed.

- For persons retiring under Clause 2, Article 27 of Decree No. 152/2006/NĐ-CP, the age mark of 55 for males and 50 for females shall be used to calculate the number of years retired early as prescribed.

Example 5: Mr. M works under normal conditions, has 20 years of social insurance contributions, suffers from a 61% reduction in working capacity, and retires at the age of 50 years and 3 months.

- Mr. M's monthly pension benefit ratio is calculated at 55%.

- Mr. M retires at the age of 50 years and 3 months, thus his retirement age is considered to be 51 years old. Since he retires 9 years earlier than the age of 60, the pension benefit ratio is reduced by 9%.

- Mr. M's monthly pension benefit ratio is 55% - 9% = 46%.

Example 6: Ms. N works under normal conditions, has 20 years of social insurance contributions, suffers from a 61% reduction in working capacity, and retires at the age of 50 years.

- Ms. N's monthly pension benefit ratio is calculated at 60%.

- Ms. N retires 5 years earlier than the age of 55 as prescribed, so the pension benefit ratio is reduced by 5%.

- Ms. N's monthly pension benefit ratio is 60% - 5% = 55%.

Example 7: Mr. Q retires at the age of 50 years. Mr. Q has 15 years of work in particularly arduous and hazardous conditions, suffers from a 61% reduction in working capacity, and has 27 years of social insurance contributions. Mr. Q's pension benefit ratio is calculated as follows:

- Mr. Q's monthly pension benefit ratio is calculated at 69%.

- Mr. Q retires 5 years earlier than the age of 55 as prescribed, so the pension benefit ratio is reduced by 5%.

- Mr. Q's monthly pension benefit ratio is 69% - 5% = 64%.

c) The monthly pension amount is calculated as the product of the monthly pension benefit ratio and the average monthly salary used for social insurance contributions. If the calculated monthly pension amount is lower than the national minimum wage, it will be adjusted to the national minimum wage.

d) The one-time allowance upon retirement is calculated according to the provisions of Clause 4, Article 28 of Decree No. 152/2006/NĐ-CP.

Example 8: Mr. P retires at the age of 60 years, has 35 years and 2 months of social insurance contributions, and his average monthly salary for social insurance contributions is 1,800,000 VND/month. Therefore, the time of social insurance contributions of Mr. P is calculated as 35 years, and the one-time allowance upon retirement of Mr. P is:

(35 – 30) x 0.5 x 1,800,000 = 4,500,000 VND

Example 9: Ms. Q retires at the age of 55 years, has 26 years and 10 months of social insurance contributions, and her average monthly salary for social insurance contributions is 1,050,000 VND/month. The time of social insurance contributions of Ms. Q is rounded to 27 years, and the one-time allowance upon retirement of Ms. Q is:

(27 – 25) x 0.5 x 1,050,000 = 1,050,000 VND

Example 10: Ms. S retires at the age of 55 years, has 27 years and 4 months of social insurance contributions, and her average monthly salary for social insurance contributions is 1,450,000 VND/month. The time of social insurance contributions of Ms. S is calculated as 27.5 years, and the one-time allowance upon retirement of Ms. S is:

(27.5 – 25) x 0.5 x 1,450,000 = 1,812,500 VND

4. The average monthly salary for calculating the pension, one-time allowance upon retirement, and one-time social insurance for workers subject to state-regulated salary systems and who have the entire period of social insurance contributions under such salary systems as prescribed in point a of Clause 1, point a of Clause 2, and point a of Clause 3 of Article 31 of Decree No. 152/2006/NĐ-CP is guided as follows:

a) For workers participating in social insurance before January 1, 1995:

 

b) For workers participating in social insurance between January 1, 1995, and December 31, 2000:

 

 

c) For workers participating in social insurance between January 1, 2001, and December 31, 2006:

 

 

d) For workers participating in social insurance from January 1, 2007, onwards:

 

 

Where:

Briefly describe technical improvements, production processes, raw materials, designs; new technology applications such as automation, digitalization, clean technology; management, marketing, distribution solutions; products winning awards or certifications related to innovation…):…_bqtl: average monthly salary for social insurance contributions.

The monthly salary for social insurance contributions includes the salary grade, rank, military rank, position allowance, seniority allowance exceeding the ceiling, and vocational seniority allowance (if applicable). This salary is calculated based on the national minimum wage at the time of calculating the average monthly salary for social insurance contributions.

5. The average monthly salary and wage for calculating the pension, one-time allowance upon retirement, and one-time social insurance for workers who have the entire period of social insurance contributions under the salary system determined by the employer as prescribed in point b of Clause 1, point b of Clause 2, and point b of Clause 3 of Article 31 of Decree No. 152/2006/NĐ-CP is guided as follows:

 

 

6. The average monthly salary and wage for calculating the pension, one-time allowance upon retirement, and one-time social insurance for workers who have both periods of social insurance contributions under the state-regulated salary system and periods under the salary system determined by the employer as prescribed in point c of Clause 1, point c of Clause 2, and point c of Clause 3 of Article 31 of Decree No. 152/2006/NĐ-CP is guided as follows:

 

Where:

a) The total monthly salary for social insurance contributions according to the state-regulated salary system is calculated as the product of the total number of months of social insurance contributions under the state-regulated salary system and the average monthly salary for social insurance contributions.

The average monthly salary for social insurance contributions is calculated in accordance with the provisions set out in Clause 4 of this Section.

b) In cases where workers have two or more periods falling within the scope of the state-regulated salary system, the total monthly salary for social insurance contributions for each period shall be calculated as provided in point a above.

The total monthly salary for social insurance contributions according to the state-regulated salary system is calculated as the sum of the total monthly salaries for social insurance contributions of all periods.

7. Suspension of pension and monthly social insurance benefits stipulated in Article 33 of Decree No. 152/2006/NĐ-CP shall be implemented as follows:

a) The time of suspension of pension and monthly social insurance benefits is calculated from the month immediately following the month in which the person receiving pension or monthly social insurance benefits begins serving a prison sentence without probation or leaves the country illegally or is declared missing by a court.

b) Pension and monthly social insurance benefits shall continue to be paid in accordance with Clause 2 of Article 33 of Decree No. 152/2006/NĐ-CP.

V- FUNERAL BENEFITS REGIME

1. When calculating the one-time funeral benefit as prescribed in Clause 1 of Article 39, if there are fractional months in the period of social insurance contributions, it shall be calculated in accordance with Clause 5 of Article 28 of Decree No. 152/2006/NĐ-CP.

2. The one-time funeral benefit for the dependents of a person receiving a pension who dies is regulated as follows in Clause 2 of Article 39 of Decree No. 152/2006/NĐ-CP.:

If death occurs from the third month onwards, the one-time funeral benefit is calculated using the following formula:

 

Where:

L_h : current pension amount;

t : number of months of pension received.

In cases where the one-time funeral benefit is lower than three months' worth of the current pension amount before death, the one-time funeral benefit shall be calculated as three months' worth of the current pension amount before death.

3. Dependents of persons receiving monthly work injury compensation or occupational disease benefits who have not yet claimed a one-time social insurance benefit and die, if they do not meet the conditions for monthly funeral benefits as prescribed in point d of Clause 1 of Article 36 or meet the conditions for monthly funeral benefits but do not have dependents entitled to monthly funeral benefits as prescribed in Clause 2 of Article 36 of Decree No. 152/2006/NĐ-CP, shall be entitled to a one-time funeral benefit. The one-time funeral benefit shall be calculated based on the number of years of social insurance contributions as prescribed in Clause 1 of Article 39 of Decree No. 152/2006/NĐ-CP.

4. In cases where dependents of persons prescribed in Clause 1 of Article 36 suffer a reduction in working capacity, the assessment of the degree of reduction in working capacity for claiming monthly funeral benefits as prescribed in Clause 2 of Article 36 of Decree No. 152/2006/NĐ-CP shall be conducted by a social insurance organization. The deadline for referring to the assessment of the degree of reduction in working capacity is within two months from the date of the worker's death.

5. In cases where a person simultaneously receives retirement benefits and monthly work injury or occupational disease benefits and dies, their dependents shall be entitled to funeral benefits as if the person had died while receiving a pension.

C. SOCIAL INSURANCE FUND

1. Settlement of payments for sickness and maternity benefits as prescribed in point a of Clause 1 of Article 43 of Decree No. 152/2006/NĐ-CP between employers and social insurance organizations shall be carried out quarterly.

In cases where the settlement amount is less than the retained amount, the employer shall be responsible for returning the excess amount to the social insurance fund in the first month of the next quarter. In cases where the settlement amount exceeds the retained amount, the social insurance organization shall make up the difference in the first month of the next quarter.

In cases where the payment for sickness and maternity benefits to employees exceeds the retained amount significantly in a quarter, the employer shall proactively settle early with the social insurance organization.

2. Suspension of contributions to the retirement and funeral benefits fund as prescribed in Article 44 of Decree No. 152/2006/NĐ-CP shall be implemented as follows:

a) The cases of suspension prescribed in Clause 1 of Article 44 include situations where employers are compelled to temporarily reduce production, suspend business operations, or reduce job positions due to natural disasters, fires, epidemics, crop failures, or other force majeure reasons.

b) Employers may suspend social insurance contributions if they meet one of the following conditions:

- The number of employees required to temporarily stop work and participate in social insurance constitutes 50% or more of the total number of employees present before the temporary cessation of production or business operations.

The determination of the number of employees required to temporarily stop work and participate in social insurance for agencies, units, organizations, and enterprises under the management of local People's Committees shall be made by the local Labor, Invalids, and Social Affairs Department; for enterprises under the management of central ministries and sectors, it shall be determined by the relevant ministries or sectors.

- Suffering losses exceeding 50% of the total value of assets due to natural disasters, fires, epidemics, crop failures, or other force majeure reasons (excluding land value).

The determination of the condition regarding asset losses for agencies, units, organizations, and enterprises under the management of local People's Committees shall be made by the local finance department; for enterprises under the management of central ministries and sectors, it shall be determined by the finance departments of the relevant ministries or sectors or the Ministry of Finance.

The value of asset losses is calculated relative to the value of assets in the preceding year.

c) The suspension of contributions to the retirement and funeral benefits fund by employers shall be considered and resolved based on the employer's written request to the competent authority as prescribed in Clause 3 of Article 44 of Decree No. 152/2006/NĐ-CP.

3. The monthly salary or wage for mandatory social insurance contributions as prescribed in Clause 3 of Article 45 of Decree No. 152/2006/NĐ-CP shall be implemented as follows:

Workers with a monthly salary or wage higher than 20 times the national minimum wage (currently 450,000 VND/month) shall have their monthly social insurance contribution amount set at 20 times the national minimum wage (maximum monthly salary or wage for social insurance contributions being 9,000,000 VND/month). When the government adjusts the national minimum wage, the monthly salary or wage for social insurance contributions will also be adjusted accordingly.

Example 1: Mr. T works at a computer component manufacturing company, with a monthly salary of 9,500,000 VND in February 2007. In this case, Mr. T's monthly social insurance contribution is 9,000,000 VND.

Example 2: Mr. U works at a wholly foreign-owned enterprise, with a monthly salary stipulated in his labor contract of 700 USD/month. In January 2007, Mr. U's actual monthly salary was 11,270,700 VND (the average exchange rate on the inter-bank foreign exchange market announced by the State Bank of Vietnam on January 2, 2007 was 16,101 VND/USD). Mr. U's monthly social insurance contribution is 9,000,000 VND.

D. IMPLEMENTATION

1. Workers who are business managers under the positions specified in Clause 13, Article 4 of the Enterprise Law and those holding management and leadership positions in cooperatives as prescribed by the Cooperative Law shall be subject to the provisions of this Circular.

2. Specialized staff at commune level who are self-paying social insurance monthly contributions according to Clause 6, Article 58 of Decree No. 152/2006/ND-CP shall pay 16% from January 2007 to December 2009 and 18% from January 2010 to December 2011 on their monthly salary before ceasing to hold their position until they have contributed for 15 years and reached 60 years old for men and 55 years old for women to receive retirement benefits.

3. Workers who stopped working according to Decree No. 41/2002/ND-CP dated September 11, 2002 of the Government, having contributed to social insurance for at least 15 years but still lacking up to five years to meet the retirement age, and who are self-paying social insurance monthly contributions according to Clause 7, Article 58 of Decree No. 152/2006/ND-CP shall pay 16% from January 2007 to December 2009 and 18% from January 2010 to December 2011 on their monthly salary before stopping work until they reach 60 years old for men and 55 years old for women to receive retirement benefits.

4. Spouses receiving spouse benefits at Vietnamese agencies abroad, who previously participated in mandatory social insurance, shall continue to contribute to social insurance during their time abroad at the monthly contribution rate specified in Point a, Clause 3, Article 42 of Decree No. 152/2006/ND-CP based on their previous monthly salary or wage when participating in social insurance to implement pension and death benefits.

Employers managing civil servants and public officials whose spouses fall under the above category shall be responsible for collecting monthly social insurance contributions from such spouses and paying them into the social insurance fund.

5. The calculation method for the period of social insurance contributions to determine eligibility for retirement and death benefits as stipulated in Clause 9, Article 58 of Decree No. 152/2006/ND-CP is as follows:

a) When determining the period of social insurance contributions for retirement and death benefits, one year must consist of 12 months.

b) Workers who have reached the age for retirement but lack up to six months of social insurance contributions may make a lump-sum payment for the remaining months at the monthly contribution rate specified in Point a, Clause 3, Article 42 of Decree No. 152/2006/ND-CP based on their monthly salary or wage prior to retirement to receive retirement benefits.

c) Workers who have not completed 15 years of social insurance contributions and lack up to six months (including workers currently suspending their social insurance contributions) who die, if their dependents are eligible for monthly death benefits, may make a lump-sum payment for the remaining months at the monthly contribution rate specified in Point a, Clause 3, Article 42 of Decree No. 152/2006/ND-CP based on their monthly salary or wage prior to death (or prior to suspension of social insurance contributions) to receive monthly death benefits.

6. Workers employed under labor contracts in state-owned companies converted to joint-stock companies; state-owned limited liability companies; state-owned limited liability companies with two or more members, shall apply the average monthly salary for social insurance contributions as stipulated in Clause 4, Section IV, Part B of this Circular to calculate their retirement pensions and lump-sum social insurance payments upon retirement provided that the companies comply with the following regulations:

a) Implementing the wage scale and wage table prescribed by the State and registered with the provincial or centrally-administered city labor management agency according to Decree No. 114/2002/ND-CP dated December 31, 2002 of the Government detailing and guiding the implementation of certain provisions of the Labor Code concerning wages;

b) Implementing wage adjustments and promotions according to State regulations for state-owned enterprises based on the wage scales and tables applied in point a of this clause;

c) Contributing to social insurance based on the wages stipulated in points a and b of this clause.

If the company does not fully comply with these regulations, workers shall apply the average monthly salary or wage for social insurance contributions as stipulated in Clause 6, Section IV, Part B of this Circular to receive social insurance benefits.

For workers with salaries or wages stipulated in their labor contracts in foreign currency, the procedures for social insurance contributions and recording in the social insurance book shall be carried out as follows:

a) The monthly social insurance salary and wage payable shall be calculated in Vietnamese dong based on the salary and wage in foreign currency converted to Vietnamese dong according to the average transaction rate in the inter-bank foreign exchange market published by the State Bank of Vietnam at the time of January 2 for the first six months of the year and July 1 for the last six months of the year. In case it coincides with a holiday and the State Bank of Vietnam has not yet published the rate, the rate of the next consecutive day published by the State Bank of Vietnam shall be used.

b) The monthly social insurance salary and wage recorded in the social insurance book shall be the salary and wage in Vietnamese dong calculated in accordance with point a of this clause.

8. The Social Insurance Organization shall be responsible for introducing workers who are preserving their social insurance contribution period to undergo a disability assessment to receive social insurance benefits.

9. In cases where a social insurance book is issued or when retirement or death benefits are processed for workers who have not been issued a social insurance book and whose original files are no longer available, there must be a written explanation from the managing authority regarding the reasons for the loss, confirming the process of participating in social insurance, and bearing legal responsibility for such confirmations, accompanied by relevant documents related to the period of work, place of work, nature of the job, and salary and wage (if applicable).

E. IMPLEMENTATION PROVISIONS

1. This Circular shall take effect fifteen days from the date of publication in the Official Gazette.

The provisions stipulated in this Circular shall apply from January 1, 2007.

2. This Circular replaces Circular No. 06/LDTX-TT dated April 4, 1995 of the Ministry of Labor, War Invalids and Social Affairs guiding the implementation of certain articles of the Social Insurance Charter promulgated together with Decree No. 12/CP dated January 26, 1995 of the Government; and Circular No. 07/2003/TT-LDTBHX dated March 12, 2003 of the Ministry of Labor, War Invalids and Social Affairs guiding the implementation of certain articles of Decree No. 01/2003/NĐ-CP dated January 9, 2003 of the Government.

3. Circular No. 12/2001/BLDTXH-TT dated December 19, 2001 of the Ministry of Labor, War Invalids and Social Affairs guiding the retirement age of underground coal miners; and the provisions on social insurance at points a, b, and c4 of Clause 1 Section II of Circular No. 19/2004/TT-LDTBHX dated November 22, 2004 of the Ministry of Labor, War Invalids and Social Affairs guiding the implementation of certain articles of Decree No. 41/2002/NĐ-CP dated April 11, 2002 of the Government concerning policies for surplus labor due to restructuring state-owned enterprises, which were amended and supplemented by Decree No. 155/2004/NĐ-CP dated August 20, 2004 of the Government, are hereby abolished.

Any difficulties encountered during implementation should be reported to the Ministry of Labor, War Invalids and Social Affairs for timely supplementary guidance within its scope and authority./.