Circular No. 17/2008/TT-BLDTBXH guiding the adjustment of wages and salaries already covered by social insurance for workers implementing wage systems determined by employers according to Decree No. 83/2008/NĐ-CP dated July 31, 2008.

CIRCULAR

GUIDELINES FOR ADJUSTING WAGES AND SALARIES ALREADY PAID INTO SOCIAL INSURANCE FOR WORKERS IMPLEMENTING WAGE SYSTEMS DETERMINED BY EMPLOYERS IN ACCORDANCE WITH DECREE NO. 83/2008/NĐ-CP OF THE GOVERNMENT DATED JULY 31, 2008

Pursuant to Decree No. 83/2008/NĐ-CP dated July 31, 2008 of the Government adjusting wages and salaries already paid into social insurance for workers implementing wage systems determined by employers (hereinafter referred to as Decree No. 83/2008/NĐ-CP).
After reaching consensus with the Ministry of Finance, the Ministry of Labor, Invalids and Social Affairs provides guidelines for adjusting wages and salaries already paid into social insurance for workers implementing wage systems determined by employers as follows:

I. APPLICABLE OBJECTS

The subjects subject to adjustment of wages and salaries already paid into social insurance as stipulated in Article 2 of Decree No. 83/2008/NĐ-CP are workers who are participating in social insurance or preserving their time of participation in social insurance, having time of payment of social insurance under the wage system determined by employers from January 1, 2007 onwards, receiving pension, lump-sum benefit upon retirement, one-time social insurance benefit, or death benefits upon death of their dependents.

II. ADJUSTMENT OF WAGES AND SALARIES ALREADY PAID INTO SOCIAL INSURANCE

1. The level of adjustment of monthly wages and salaries already paid into social insurance applicable to the subjects specified in Section I of this Circular shall be based on the average consumer price index for the year as stipulated in Article 3 of Decree No. 83/2008/NĐ-CP, as follows:

a) The level of adjustment of wages and salaries already paid into social insurance corresponding to the years of social insurance contribution from before 1995 to 2007 for workers receiving pension, lump-sum benefit upon retirement, one-time social insurance benefit, or death benefits upon death of their dependents from January 1, 2007 to December 31, 2007, shall be implemented according to Table 1 below:

Table 1:

b) The level of adjustment of wages and salaries already paid into social insurance corresponding to the years of social insurance contribution from before 1995 to 2008 for workers receiving pension, lump-sum benefit upon retirement, one-time social insurance benefit, or death benefits upon death of their dependents from January 1, 2008 to December 31, 2008, shall be implemented according to Table 2 below:

1. This Circular takes effect from February 20, 2023; the provisions of this Circular shall apply from January 1, 2023.

2. Adjustment formula

3. The average monthly wage or salary paid into social insurance serving as the basis for calculating pension, lump-sum benefit upon retirement, one-time social insurance benefit, and death benefits upon death is calculated in accordance with Article 31 of Decree No. 152/2006/NĐ-CP dated December 22, 2006 and Article 34 of Decree No. 68/2007/NĐ-CP dated April 19, 2007 of the Government, wherein the monthly wage or salary paid into social insurance under the wage system determined by employers is adjusted in accordance with Clause 2 of Section II of this Circular.

4. When adjusting wages and salaries already paid into social insurance in accordance with this Circular, for cases where the monthly wage recorded in the social insurance book is in foreign currency, it shall be converted into Vietnamese Dong at the exchange rate published by the State Bank of Vietnam at the time of social insurance payment of the foreign currency. Thereafter, it shall be implemented in accordance with Clause 1 and Clause 2 of Section II of this Circular.

Example 1: Mr. Nguyen Van A, born in February 1947, has a total of 34 years and 5 months of social insurance contributions, retired in March 2007. The evolution of wages and salaries paid into social insurance of Mr. A is as follows:

- From October 1971 to September 1991 (20 years = 240 months), receiving wages under the system prescribed by the State, the average monthly wage paid into social insurance over the last 5 years was 1,161,000 VND/month.

- From October 1991 to December 1999 (8 years and 3 months = 99 months); from January 2000 to December 2000 (12 months), he was unemployed and preserved his time of social insurance contribution; and from January 2001 to February 2007 (6 years and 2 months = 74 months), he continued to participate in social insurance and received wages and salaries determined by employers. The total monthly wages and salaries paid into social insurance from October 1991 to February 2007 of Mr. A were adjusted according to the adjustment levels specified in Table 1 and calculated as follows:

- In March 2007, Mr. A stopped working and received social insurance benefits.

- The monthly pension of Mr. A is calculated as follows:

* Calculating the average monthly wage and salary paid into social insurance:

Where:

+ Total monthly wages paid into social insurance under the wage system prescribed by the State:

1,161,000 VND/month x 240 months = 278,640,000 VND

+ Total monthly wages and salaries paid into social insurance under the wage system determined by employers after adjustment (taken from column 6): 561,574,000 VND.

+ Total number of months of social insurance contribution:

240 months + 173 months = 413 months

+ Average monthly wage and salary serving as the basis for calculating pension and lump-sum benefit upon retirement:

(278,640,000 VND + 561,574,000 VND): 413 months = 2,034,416 VND/month

* Calculating Mr. A's monthly pension and lump-sum benefit upon retirement:

+ Monthly pension amount is:

2,034,416 VND/month x 75% = 1,525,812 VND/month

+ Lump-sum benefit upon retirement of Mr. A is:

2,034,416 VND/month x 2.25 months = 4,577,436 VND

* Mr. A receives a monthly pension of 1,525,812 VND/month and is entitled to receive the difference in pension and lump-sum benefit upon retirement due to the implementation of the adjustment as stipulated in this Circular.

Example 2: Ms. Nguyen Thi B, born in August 1953, has a total social insurance contribution period of 25 years and 8 months, retiring in September 2008. The development of her salary and wages for social insurance contributions is as follows:

- From January 1983 to December 2000 (18 years = 216 months), she received state-regulated salaries. The average monthly social insurance contribution salary over the last five years was 980,000 VND/month.

- From January 2001 to August 2008 (7 years and 8 months = 92 months), she received salaries and wages determined by the employer. The total monthly salary and wage contributions from January 2001 to August 2008 were adjusted according to the adjustment levels specified in Table 2 and calculated as follows:

- In September 2008, Ms. B stopped working and began receiving monthly pension benefits.

- The calculation of Ms. B's monthly pension benefit is as follows:

* Calculating the average monthly wage and salary paid into social insurance:

Where:

- Total monthly salary contributions under the state-regulated salary system:

980,000 VND/month x 216 months = 211,680,000 VND

- Total monthly salary and wage contributions under the employer-determined salary system after adjustment (taken from column 6): 248,424,000 VND.

- Total months of social insurance contributions:

216 months + 92 months = 308 months

- The average monthly salary and wage used as the basis for calculating the pension and one-time allowance upon retirement:

(211,680,000 VND + 248,424,000 VND) ÷ 308 months = 1,493,844 VND/month

* The calculation of Ms. B's monthly pension and one-time allowance upon retirement is as follows:

- The monthly pension amount is:

1,493,844 VND/month x 75% = 1,120,383 VND/month

- The one-time allowance upon retirement for Ms. B is:

1,493,844 VND/month x 0.5 month = 746,922 VND

III. IMPLEMENTATION

1. The Ministry of Labor, Invalids, and Social Affairs shall organize guidance and inspection of implementation in accordance with the provisions of Decree No. 83/2008/NĐ-CP and this Circular.

2. The Vietnam Social Security shall be responsible for implementing the adjustment of salaries and wages already contributed to social insurance in accordance with the provisions of Decree No. 83/2008/NĐ-CP and the guidance provided in this Circular, specifically as follows:

a) Adjusting salaries and wages already contributed to social insurance for workers who have worked under the employer-determined salary system and are entitled to a pension, one-time allowance, or one-time social security upon retirement, or whose dependents are entitled to a one-time allowance upon death, as stipulated in this Circular.

b) Adjusting salaries and wages already contributed to social insurance for workers who have worked under the employer-determined salary system to recalculate their pensions, one-time allowances, one-time social security, and one-time allowances for dependents, and to make up the difference in pensions, one-time allowances, one-time social security, and one-time allowances for workers who retired and received social security benefits from January 1, 2007 onwards but had not been implemented according to the guidance in this Circular.

3. The Social Security Fund shall ensure the funding for adjusting the monthly salaries and wages already contributed to social insurance to pay out pensions, one-time allowances, one-time social security, and one-time allowances as stipulated in Decree No. 83/2008/NĐ-CP and the guidance in this Circular.

IV. IMPLEMENTATION PROVISIONS

1. This Circular takes effect 15 days after its publication in the Official Gazette; the provisions of this Circular apply from January 1, 2007.

2. Any difficulties encountered during implementation should be reported to the Ministry of Labor, Invalids, and Social Affairs for timely research and resolution./.