Circular No. 06/2003/TT-BLDTBXH guiding the implementation of adjustments to pension and social insurance benefits according to Government Decree No. 03/2003/NĐ-CP dated January 15, 2003.

CIRCULAR

Guidelines for Implementing Adjustments to Pensions and Social Insurance Benefits Pursuant to Decree No. 03/2003/NĐ-CP dated January 15, 2003 of the Government

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Implementing Clause 2 and Clause 3 of Article 1 of Decree No. 03/2003/NĐ-CP dated January 15, 2003 of the Government on adjusting salaries, social allowances, and reforming the salary management mechanism in one step; After receiving opinions from the Ministry of Home Affairs, the Ministry of Finance, the Ministry of National Defense, the Ministry of Public Security, and the Vietnam General Confederation of Labor, the Ministry of Labor, Invalids, and Social Affairs provides guidelines for implementing adjustments to pension levels and social insurance benefits as follows:

I. APPLICABLE OBJECTS

The subjects subject to adjustments in pension levels and social insurance benefits as stipulated in Clause 3 of Article 1 of Decree No. 03/2003/NĐ-CP dated January 15, 2003 of the Government include:

1. Persons receiving pensions (including civil servant, public employee, and state agency staff pensions; military, police, and confidential service pensions).

2. Persons receiving disability allowances (including those receiving allowances under Decision No. 91/2000/QĐ-TTg dated August 4, 2000 of the Prime Minister).

3. Persons receiving rubber plantation worker allowances.

4. Persons receiving sickness, maternity, work injury, occupational disease, and death benefits.

5. Village and ward cadres who have retired and are receiving allowances pursuant to Decree No. 09/1998/NĐ-CP dated January 23, 1998 of the Government.

II. CALCULATION OF PENSION LEVELS AND SOCIAL INSURANCE BENEFITS

The subjects specified in Section I above shall be calculated for their pension levels and social insurance benefits as follows:

1. For those persons currently receiving pensions, disability allowances, rubber plantation worker allowances, work injury allowances, occupational disease allowances, and monthly survivor benefits before January 1, 2003, the level of benefit from January 1, 2003 shall be calculated as follows:

a. Those persons receiving pensions according to the Social Insurance Regulations issued together with Decree No. 218/CP dated December 27, 1961, Decree No. 161/CP dated October 30, 1964 of the Government, and subsequent amendments and supplements issued prior to September 18, 1985, including those persons receiving pensions after September 18, 1985 whose pensions are still calculated according to Decree No. 218/CP and Decree No. 161/CP mentioned above, shall have their pensions calculated as follows:

The pension amount currently received in December 2002 includes the additional allowance of 25,000 VND/month for those persons receiving according to Decision No. 234/QĐ-TTg dated December 22, 1999 of the Prime Minister.

Example 1: Mr. Nguyen Van A retired in July 1985 (according to Decree No. 218/CP), with a current pension amount received in December 2002 of 425,000 VND (of which 400,000 VND is the pension based on the salary scale and there is an additional allowance of 25,000 VND/month received according to Decision No. 234/QĐ-TTg dated December 22, 1999 of the Prime Minister), then from January 1, 2003, the pension amount will be calculated as follows:

425,000 VND x 1.46 = 620,500 VND

Example 2: Mr. Nguyen Van B retired in November 1985, but his pension is calculated according to Decree No. 218/CP, with a current pension amount received in December 2002 of 450,000 VND, then from January 1, 2003, the pension amount will be calculated as follows:

450,000 VND x 1.46 = 657,000 VND

b. Those persons receiving pensions according to Decree No. 236/HĐBT dated September 18, 1985 of the Council of Ministers (now the Government), including those persons receiving pensions after January 1, 1994 whose pensions are still calculated according to Decree No. 236/HĐBT dated September 18, 1985 of the Council of Ministers, shall have their pensions calculated as follows:

Example 3: Mr. Nguyen Van C retired in July 1990 (according to Decree No. 236/HĐBT), with a current pension amount received in December 2002 of 576,000 VND, then from January 1, 2003, the pension amount will be calculated as follows:

576,000 VND x 1.42 = 817,920 VND

Example 4: Mr. Nguyen Van D retired in August 1993, but his pension is calculated according to Decree No. 236/HĐBT, with a current pension amount received in December 2002 of 581,000 VND, then from January 1, 2003, the pension amount will be calculated as follows:

581,000 VND x 1.42 = 825,020 VND

c. Those persons receiving pensions according to Decree No. 43/CP dated June 22, 1993, Decree No. 66/CP dated September 30, 1993, Decree No. 12/CP dated January 26, 1995, and Decree No. 45/CP dated July 15, 1995 of the Government, including those persons receiving pensions according to subsequent amendments and supplements issued after June 22, 1993 and those persons receiving pensions at fixed rates, shall have their pensions calculated as follows:

Example 5: Mr. Nguyen Van Đ retired in June 1994 (according to Decree No. 43/CP), with a current pension amount received in December 2002 of 555,000 VND, then from January 1, 2003, the pension amount will be calculated as follows:

555,000 VND x 1.381 = 766,455 VND

d. Those persons receiving disability allowances; allowances according to Decision No. 91/2000/TTg dated August 4, 2000 of the Prime Minister; rubber plantation worker allowances; work injury allowances; and monthly survivor benefits shall have their allowances calculated as follows:

Example 6: Mr. Nguyen Van E retired and is receiving disability allowances in May 1985, with a current allowance amount received in December 2002 of 250,000 VND, then from January 1, 2003, the allowance amount will be calculated as follows:

250,000 VND x 1.381 = 345,250 VND

e. Village and ward cadres who have retired and are receiving allowances pursuant to Article 4 of Decree No. 09/1998/NĐ-CP dated January 23, 1998 of the Government shall have their allowances calculated as follows:

2. Persons receiving pensions and social insurance benefits from January 1, 2003 onwards according to the Social Insurance Regulations issued together with Decree No. 12/CP dated January 26, 1995, Decree No. 45/CP dated July 15, 1995, Decree No. 09/1998/NĐ-CP dated January 23, 1998 of the Government, and subsequent amendments and supplements issued after January 26, 1995, shall have their pensions and social insurance benefits calculated based on the minimum wage of 290,000 VND/month for those contributing to social insurance according to the salary scale and pay grade set by the State; for those who have both periods of contributions to social insurance according to the salary scale and pay grade set by the State and periods of contributions to social insurance not according to the salary scale and pay grade set by the State, the average contribution wage for the last five years in the public sector shall be calculated based on the minimum wage of 290,000 VND/month for the period of contributions to social insurance according to the salary scale and pay grade set by the State.

3. For persons who suffered work-related accidents or occupational diseases before January 1, 2003, or those who stopped working to receive one-time benefits, sickness benefits, maternity benefits, or died before January 1, 2003 but still had entitlement periods for benefits remaining after January 1, 2003, the calculation shall be as follows:

a. For persons who suffered work-related accidents or occupational diseases and were treated and discharged from hospital before January 1, 2003, the one-time benefit or monthly benefit amount for the period before January 1, 2003, shall be paid at the December 2002 minimum wage level. In cases where treatment began before January 1, 2003, and discharge occurred on or after January 1, 2003, the benefits shall be calculated based on the minimum wage of 290,000 VND per month.

Example 7: Mr. Tran Van N suffered a work-related accident and was treated and discharged on December 1, 2002, and was rated with a disability grade of 41% in February 2003; Mr. N's monthly work-related accident benefit shall be calculated as follows:

- The December 2002 benefit shall be calculated based on the minimum wage of 210,000 VND per month.

- The monthly benefit from January 1, 2003, shall be calculated based on the minimum wage of 290,000 VND per month.

Example 8: Mr. Tran Van M suffered a work-related accident and was treated on November 1, 2002, and discharged on January 15, 2003, and was rated with a disability grade of 45%; Mr. M's monthly work-related accident benefit shall be calculated based on the minimum wage of 290,000 VND per month.

b. For persons who stopped working to receive sickness or maternity benefits before January 1, 2003, but continued to have entitlement periods for such benefits after January 1, 2003, the time spent on sick leave or maternity leave before January 1, 2003, shall be compensated according to the December 2002 minimum wage level. The period starting from January 1, 2003, shall be calculated based on the minimum wage of 290,000 VND per month.

Example 9: Mr. Nguyen Van Q contributed to social insurance based on the state salary scale, stopped working to receive sickness benefits from December 15, 2002, with a total entitlement period of 30 days; the calculation of the benefit shall be as follows: 17 days at the December 2002 minimum wage level, and the remaining 13 days at the minimum wage of 290,000 VND per month.

Example 10: Ms. Tran Thi T contributed to social insurance based on the state salary scale, stopped working to receive maternity benefits from November 1, 2002, with a total entitlement period of 4 months; the calculation of the benefit shall be as follows: November and December 2002 benefits at the minimum wage of 210,000 VND per month, and the remaining 2 months at the minimum wage of 290,000 VND per month.

c. For persons who stopped working to receive one-time social insurance benefits before January 1, 2003, but received a decision for such benefits from the Social Insurance Authority on or after January 1, 2003, the benefit shall be calculated based on the minimum wage of 290,000 VND per month.

d. For persons who died before January 1, 2003, but whose relatives have not yet received funeral expenses and one-time benefits, these shall be paid according to the December 2002 benefit level.

4. For military personnel and public security officers who transferred to civilian jobs and retired or stopped working due to health reasons, receiving benefits as stipulated in Article 3 of Decision No. 812/TTg dated December 12, 1995, issued by the Prime Minister, and for those receiving pensions or social insurance benefits residing in areas with regional allowances, the transfer allowance or regional allowance shall be calculated based on the minimum wage of 290,000 VND per month. Retired individuals living alone, as provided for in Article 2 of Decision No. 812/TTg dated December 12, 1995, shall have their pension adjusted to 435,000 VND per month.

III. IMPLEMENTATION

1. The Ministry of Labor, Invalids, and Social Affairs shall coordinate with the Ministry of Finance and the Vietnam Social Security to guide relevant agencies: Departments of Labor, Invalids, and Social Affairs, Departments of Finance and Price Control, and Social Security branches in provinces and centrally-administered cities to implement the provisions of Decree No. 03/2003/NĐ-CP dated January 15, 2003, issued by the Government, and the guidance provided in this Circular.

2. People's Committees of provinces and centrally-administered cities shall direct the Departments of Labor, Invalids, and Social Affairs and other competent agencies to inspect and urge the implementation of the provisions of this Circular.

3. The Vietnam Social Security shall organize the implementation and prepare reports as prescribed below:

a. Adjust pensions and social insurance benefits and organize payments to beneficiaries in accordance with regulations.

b. Ensure funding for pensions and social insurance benefits for beneficiaries covered by the social insurance fund.

c. Prepare reports according to the model attached to this Circular and submit them to the Ministry of Labor, Invalids, and Social Affairs, the Ministry of Finance, and the Ministry of Home Affairs.

d. Implement social insurance contributions for individuals receiving salaries based on the state salary scale, calculated at the adjusted minimum wage level pursuant to Decree No. 03/2003/NĐ-CP dated January 15, 2003, issued by the Government.

4. Additional funds required for adjusting pensions and social insurance benefits for beneficiaries covered by the budget shall be guaranteed by the Ministry of Finance.

IV. IMPLEMENTATION PROVISIONS

1. This Circular shall take effect fifteen days after its publication in the Official Gazette; the provisions of this Circular shall apply from January 1, 2003.

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