Joint Circular No. 11/2005/TTLT-BNV-BLDTBXH-BTC-UBDT guiding the implementation of regional allowances

CIRCULAR

Guidelines for Implementing Regional Allowance Regulations

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Implementing Decree No. 204/2004/NĐ-CP dated December 14, 2004 of the Government on salary systems for civil servants, public officials, and members of the armed forces; and Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government stipulating the wage scale and allowance system in state-owned companies; the Ministry of Home Affairs, the Ministry of Labor - War Invalids and Social Affairs, the Ministry of Finance, and the Committee for Ethnic Minorities jointly issue guidelines for implementing regional allowances as follows:

I. SCOPE AND APPLICABLE SUBJECTS:

1. Civil servants (including probationary civil servants), public officials, those in their trial period, probationary period, and contractual workers who have been assigned wages according to the wage table prescribed by the State work in state agencies and state-run units established by competent authorities.

2. Full-time cadres and civil servants at communes, wards, and towns.

3. Cadres, civil servants, and public officials under state establishment and receiving wages according to the wage table prescribed by the State who are dispatched to work at associations, non-governmental organizations, projects, and international agencies located in Vietnam.

4. Personnel engaged in confidential work in confidential organizations.

5. Officers, professional military personnel, non-commissioned officers, soldiers, and workers in units under the People's Army and the People's Public Security Force.

6. Those working in companies operating under the Law on State-Owned Enterprises, development support funds, and the Deposit Insurance Corporation of Vietnam (hereinafter referred to collectively as state-owned companies), including:

a) Full-time members of the Board of Directors; members of the Supervisory Board.

b) General Director, Director, Deputy General Director, Deputy Director, Chief Accountant (excluding those working under contracts).

c) Production and business employees; professional and technical staff and administrative and service personnel working under labor contracts as stipulated in Decree No. 44/2003/NĐ-CP dated May 9, 2003 of the Government detailing and guiding the implementation of certain provisions of the Labor Code regarding labor contracts.

7. Retirees, those who stopped working due to loss of working capacity, workplace accidents, occupational diseases, and those receiving monthly benefits instead of salaries.

8. War invalids (including type B war invalids and those enjoying policies similar to war invalids), and disabled veterans receiving monthly benefits but not receiving salaries or social insurance benefits.

II. PRINCIPLES FOR DETERMINING AND CALCULATING REGIONAL ALLOWANCES

1. Principles for Determining Regional Allowances:

a) Factors for Determining Regional Allowances:

Natural geographic factors such as: harsh climate conditions, manifested in extreme temperatures, humidity, altitude, air pressure, wind speed, etc., higher or lower than normal, affecting human health;

Remote and isolated areas (sparse population, far from cultural, political, economic centers, far from mainland...), poor road infrastructure, bridges, schools, healthcare facilities, commercial services, difficult travel, affecting material and spiritual life;

Additionally, when determining regional allowances, special difficulties, border areas, islands, and marshlands may be considered.

b) Regional allowances are mainly determined based on administrative boundaries of communes, wards, and towns (collectively referred to as communes). Agencies, units, and state-owned companies located within a commune will receive allowances according to that commune's rate. In some exceptional cases where they are far from populated areas or adjacent to multiple communes, separate allowance rates may be specified.

c) When factors used to determine regional allowances or commune boundaries change (splitting, merging, new establishment...), allowances will be reassessed or adjusted accordingly.

2. Levels of Regional Allowances:

a) Regional allowances are set at seven levels: 0.1; 0.2; 0.3; 0.4; 0.5; 0.7; and 1.0 relative to the national minimum wage; level 1.0 is only applicable to particularly difficult and arduous islands like the Spratly Islands in Khanh Hoa Province.

The amount of regional allowance is calculated using the following formula:

Example 1. According to the national minimum wage of 290,000 VND/month, the amounts of regional allowances implemented from October 1, 2004 are as follows:

For non-commissioned officers and conscript soldiers under the People's Army and the People's Public Security Force, the amount of regional allowance is calculated based on the rank allowance for second-class private using the following formula:

Example 2. According to the national minimum wage of 290,000 VND/month, the amounts of regional allowances for non-commissioned officers and conscript soldiers under the People's Army and the People's Public Security Force implemented from October 1, 2004 are as follows:

b) Based on the factors determining regional allowance levels stipulated in this Circular and the current regional allowance levels enjoyed by communes and units nationwide, the inter-ministerial circular will publish a list of commune areas and certain units entitled to regional allowances in the annex to this Circular.

3. Method of Calculating Regional Allowances

a) Regional allowances are determined and paid based on the place of work for those currently employed; for retirees and those receiving monthly benefits as stipulated, allowances are determined, calculated, and paid based on their registered permanent residence and place of receipt of pension or benefit.

b) Regional allowances are paid concurrently with salaries, allowances, and monthly benefits.

c) In cases of temporary assignments, study, treatment, or recuperation lasting one month or more, regional allowances are received according to the rate prescribed at the assignment, study, treatment, or recuperation location from the day of arrival; if the new location does not offer regional allowances, the previous allowance is discontinued.

4. Source of Funds for Paying Regional Allowances

a. For those currently employed

For agencies and units fully funded by the state budget, regional allowances shall be paid from the state budget according to the current budget classification within the annual budget allocation granted to such agencies and units.

For agencies implementing personnel quotas and administrative management expenses, and public service units operating on self-financing, regional allowances shall be covered from the allocated personnel quota funds and self-financed resources.

For state-owned enterprises, regional allowances shall be included in the unit labor cost and accounted for in production costs or business expenses.

b) For retirees, those who have ceased work due to loss of working capacity, occupational accidents, or occupational diseases receiving monthly benefits instead of salary; war invalids and disabled veterans receiving monthly benefits but not entitled to salary or social insurance benefits:

For subjects funded by the state budget, regional allowances shall be paid according to the current budget classification.

For subjects funded by the Social Insurance Fund, regional allowances shall be guaranteed by the Social Insurance Fund.

III. IMPLEMENTATION

1. The Chairman of the People's Committee of provinces and centrally-administered cities (hereinafter referred to collectively as the Chairman of the People's Committee of provinces), Ministers, Heads of ministerial-level agencies, and Heads of government-affiliated agencies (hereinafter referred to collectively as Heads of central ministries and sectors), based on the list of communes and certain units entitled to regional allowance levels prescribed in this Circular, shall direct relevant functional units to implement accordingly. In cases requiring adjustments (increases, decreases) or additions to regional allowances, the following requirements must be met:

a. Following territorial management principles, agencies and units located in localities shall submit documents to the People's Committee of districts, urban districts, towns, and provincial cities (hereinafter referred to collectively as the People's Committee of districts). The People's Committee of districts shall bear the responsibility of proposing the People's Committee of provinces to examine and balance comprehensively, thereafter the Chairman of the People's Committee of provinces shall submit documents to the Ministry of Home Affairs for examination and decision.

Specifically, for agencies, units, and state-owned companies under central ministries and sectors located far from populated areas or adjacent to multiple communes, the Heads of central ministries and sectors shall propose the Ministry of Home Affairs to examine and balance comprehensively.

b. The application dossier for regional allowances includes the following contents:

The area applying for regional allowances (commune, ward, town; boundaries of agencies, units, state-owned companies), detailed explanations and clear demarcation of the administrative boundaries of the unit applying for regional allowances, drawing the administrative boundary map of the commune, ward, or town (or agencies, units, state-owned companies adjacent to multiple communes, wards, or towns) with water and land transportation routes, elevation or depression relative to sea level;

Detailed explanation of factors related to the determination of regional allowances, the current level of regional allowances enjoyed by neighboring communes (if any), and the proposed level of regional allowances to be applied;

Estimated number of subjects enjoying regional allowances in the area and the financial needs to implement adjustments or supplements to regional allowances for related subjects in the area (including separately for those receiving salaries, allowances, and monthly benefits from the state budget).

2. Based on the proposals of the People's Committees of provinces and central ministries and sectors, the Ministry of Home Affairs shall decide after reaching consensus through consultation with the Ministry of Labor, Invalids and Social Affairs, the Ministry of Finance, and the Committee for Ethnic Minorities.

IV. EFFECTIVE DATE OF IMPLEMENTATION

1. This Circular shall take effect fifteen days after its publication in the Official Gazette.

Abolish Joint Circular No. 03/2001/TTLT-BLDTBXH-BTC-UBDTMN dated January 18, 2001, jointly issued by the Ministry of Labor, Invalids and Social Affairs, the Ministry of Finance, and the Committee for Ethnic Minorities (now the Committee for Ethnic Minorities) guiding the implementation of regional allowance regulations.

2. The regional allowance system stipulated in this Circular shall take effect from October 1, 2004.

3. Cadres, civil servants, and employees working in Party, Front, and mass organizations' agencies and public service units shall implement the regional allowance system according to the guidelines of the Central Organization Department.

During the implementation process, if there are any difficulties, ministries, sectors, and localities shall report them to the joint ministries for research and resolution.