Circular No. 58/2007/TT-BTC guiding financial management for the Vietnam Social Security

CIRCULAR

Guidelines for Financial Management of the Vietnam Social Security

__________________________

Pursuant to Decision No. 41/2007/QĐ-TTg dated March 29, 2007 of the Government on financial management for the Vietnam Social Security; the Ministry of Finance issues the following guidelines:

PART I

MANAGEMENT OF STATE BUDGET FUNDS FOR SOCIAL INSURANCE

I. Contents of State Budget Funds for Social Insurance:

The state budget ensures funds to implement social insurance benefits for individuals who retired and received social insurance benefits before January 1, 1995, and pays pensions to military personnel directly participating in the resistance war against the United States to save the country from April 30, 1975, or earlier, with at least 20 years of service in the military and have been discharged or demobilized, including:

1. Regular monthly expenditures:

- Pension.

- Disability allowance.

- Rubber worker allowance.

- Allowance for work-related accidents and care for accident victims.

- Allowance for occupational diseases and care for occupational disease victims.

- Bereavement allowance (basic rate and maintenance).

2. One-time allowances: Funeral expenses, one-time bereavement allowance.

3. Provision of assistive devices for rehabilitation of work-related accident victims.

4. Payment of health insurance premiums for eligible beneficiaries as prescribed.

5. Administrative fees for payments.

6. Other expenses (if any).

II. Preparation, Review, Allocation, and Settlement of State Budget Funds for Social Insurance:

The preparation, review, allocation, and settlement of state budget funds for social insurance shall be carried out in accordance with the provisions of the State Budget Law, guiding documents of the Law, and the specific regulations below:

1. Establishment of budget projections:

- The expenditure budget must fully reflect each item of expenditure listed in Section I above, categorized by type of beneficiary and current benefit levels, accompanied by explanations regarding the number of beneficiaries currently receiving benefits, projected increases or decreases in beneficiaries, and other anticipated expenditure needs for the budget year.

- The expenditure budget of the district-level social security offices (hereinafter referred to collectively as district-level social security offices); the expenditure budget of provincial-level social security offices (hereinafter referred to as provincial-level social security offices) shall be prepared in accordance with the guidance of the Vietnam Social Security.

- The expenditure budget of the Vietnam Social Security shall be compiled based on the expenditure budgets of provincial-level social security offices, reviewed by the Vietnam Social Security Management Council before submission to the Ministry of Finance. The Ministry of Finance will consider, consolidate, and submit to the Prime Minister for approval of the expenditure budget for the Vietnam Social Security.

2. Allocation of budget projections:

- Annually, based on the social insurance expenditure budget allocated by the competent authority, the Vietnam Social Security shall allocate and decide on the expenditure budget for lower-level social security offices (allocated under category 13, sub-item 08, individual payment expense items, item 124) in accordance with the State Budget Law and its guiding documents; ensuring that the total allocated funds do not exceed the amount allocated by the competent authority, specifically:

- Allocate and notify funds to provincial-level social security offices without exceeding the total amount allocated by the Prime Minister to the Vietnam Social Security.

- Allocate and notify funds to district-level social security offices without exceeding the total amount allocated by the Vietnam Social Security to provincial-level social security offices.

3. Disbursement of Funds:

- Monthly, before the 26th day of the previous month, the Ministry of Finance shall allocate funds from the state budget to ensure the Social Security Fund for the Vietnam Social Security to pay pensions and social insurance allowances to beneficiaries. The maximum amount allocated equals the average monthly amount of the budget approved by the competent authority.

4. Final settlement of expenses:

a) Preparation and Submission of Final Accounts Report:

- Social security offices at all levels shall prepare and submit final accounts reports in accordance with the accounting regulations for social security as stipulated by the Ministry of Finance.

- The final accounts report must include complete forms and explanations as required.

b) Examination, Approval, and Audit of Final Accounts:

Implementation in accordance with Circular No. 01/2007/TT-BTC dated January 2, 2007, of the Ministry of Finance on examination, audit, and notification of annual final accounts for administrative agencies, public institutions, organizations supported by the state budget, and local budgets, specifically:

- Provincial-level social security offices shall examine and notify the annual final accounts for district-level social security offices.

- The Vietnam Social Security shall audit and notify the annual final accounts for provincial-level social security offices.

- The Ministry of Finance shall audit and notify the annual final accounts of the Vietnam Social Security.

- State budget funds allocated for social insurance expenditure must be used strictly in accordance with policies and regulations and settled fully as required. After the annual final accounts are approved, any surplus funds may be transferred to the next year's budget for use and deducted from the allocation for the next year; if there is a shortage of funds, the Ministry of Finance will arrange for inclusion in the budget of the immediately following year, subject to approval by the competent authority to provide additional funding to the Vietnam Social Security.

PART II

MANAGEMENT OF THE SOCIAL INSURANCE FUND

The social insurance fund is managed uniformly within the Vietnam Social Security system, implemented separately and balanced according to each component fund: Compulsory Social Insurance Fund, Compulsory Health Insurance Fund, and Voluntary Health Insurance Fund.

I. Sources of Revenue for Component Funds:

1. Compulsory social insurance revenue is implemented in accordance with Articles 42, 43, 44, and 45 of Decree No. 152/2006/NĐ-CP dated December 22, 2006, of the Government guiding certain provisions of the Social Insurance Law on compulsory social insurance.

2. Compulsory health insurance revenue is implemented in accordance with Article 15 of Decree No. 63/2005/NĐ-CP dated May 16, 2005, of the Government on promulgating the Health Insurance Regulations and guiding documents of the competent authority.

3. Voluntary health insurance revenue is implemented in accordance with Article 26 of Decree No. 63/2005/NĐ-CP dated May 16, 2005, of the Government on promulgating the Health Insurance Regulations and guiding documents of the competent authority.

II. Management of Social Insurance and Health Insurance Revenue:

1. BASED ON THE PROVISIONS OF THE STATE REGARDING THE COLLECTION OF SOCIAL INSURANCE AND HEALTH INSURANCE; THE VIETNAM SOCIAL INSURANCE SHALL DEVELOP AND ISSUE SPECIFIC REGULATIONS ON PROCEDURES AND PROCEDURES FOR COLLECTION AND SUBMISSION TO ENSURE CORRECT, COMPLETE, TIMELY COLLECTION AND STRICT MANAGEMENT OF REVENUE SOURCES.

2. WITH RESPECT TO THE COLLECTION OF HEALTH INSURANCE FOR PERSONS RECEIVING PENSION OR SOCIAL INSURANCE BENEFITS, THE SOCIAL INSURANCE AUTHORITY SHALL TRANSFER FUNDS FROM THE COMPULSORY SOCIAL INSURANCE FUND TO THE COMPULSORY HEALTH INSURANCE FUND.

3. EMPLOYERS ARE RESPONSIBLE FOR PAYING IN FULL AND ON TIME THE AMOUNTS DUE FOR SOCIAL INSURANCE AND HEALTH INSURANCE CONTRIBUTIONS AS PROVIDED BY LAW AND GUIDELINES ISSUED BY THE VIETNAM SOCIAL INSURANCE. IF PAYMENTS ARE DELAYED FOR 30 DAYS OR MORE, IN ADDITION TO LEGAL PENALTIES FOR VIOLATIONS OF LAWS ON ADMINISTRATIVE SANCTIONS IN THE FIELD OF SOCIAL INSURANCE AND HEALTH INSURANCE, THE EMPLOYER MUST ALSO PAY THE AMOUNT OWED PLUS INTEREST AT THE RATE OF THE INVESTMENT RETURN OF THE SOCIAL INSURANCE FUND FOR THAT YEAR. THIS DOES NOT APPLY TO EMPLOYERS PERMITTED BY THE GOVERNMENT, THE PRIME MINISTER, OR AUTHORITIES TO SUSPEND PAYMENTS UNDER ARTICLE 44, CLAUSE 2 OF DECREE NO. 152/2006/NĐ-CP DATED DECEMBER 22, 2006.

UNITS THAT FAIL TO COMPLY WITH THE ABOVE REQUIREMENTS, UPON REQUEST OF THE AUTHORIZED AUTHORITIES, THE STATE TREASURY, BANKS, AND CREDIT ORGANIZATIONS WHERE THE UNIT HAS AN ACCOUNT SHALL BE RESPONSIBLE FOR WITHDRAWING FUNDS FROM THE UNIT'S ACCOUNT AND TRANSFERRING THEM TO THE SOCIAL INSURANCE AUTHORITY'S ACCOUNT (INCLUDING THE AMOUNT OWED, UNPAID AMOUNTS, AND INTEREST) WITHOUT THE UNIT'S CONSENT (EXCEPT FOR UNITS PERMITTED BY THE GOVERNMENT AND THE PRIME MINISTER TO DELAY PAYMENTS).

III. USE OF THE SOCIAL INSURANCE FUND

1. THE COMPULSORY SOCIAL INSURANCE FUND IS USED TO PAY BENEFITS TO ELIGIBLE INDIVIDUALS FROM JANUARY 1, 1995, INCLUDING THE FOLLOWING ITEMS:

a. RETIREMENT PAY (REGULAR AND ONE-TIME).

b. COMPENSATION FOR WORKERS INJURED ON THE JOB AND THEIR ATTENDANTS, AND EQUIPMENT SUPPLIES FOR INJURED WORKERS.

c. SICKNESS ALLOWANCE.

d. MATERNITY ALLOWANCE.

đ. OCCUPATIONAL DISEASE ALLOWANCE AND SUPPORT FOR ATTENDANTS OF OCCUPATIONALLY ILL WORKERS, AND EQUIPMENT SUPPLIES FOR OCCUPATIONALLY ILL WORKERS.

e. COSTS FOR STRENGTHENING AND RESTORING HEALTH.

g. FUNERAL BENEFITS (ONE-TIME, BASIC PENSION, AND MAINTENANCE) AND FUNERAL EXPENSES.

h. HEALTH INSURANCE CONTRIBUTIONS FOR ELIGIBLE PERSONS AS PROVIDED BY LAW.

i. CHARGES FOR PAYMENT.

k. REWARDS FOR EMPLOYERS WHO EFFECTIVELY IMPLEMENT LABOR PROTECTION, PREVENTION OF WORKPLACE ACCIDENTS, AND OCCUPATIONAL DISEASES AS PROVIDED IN CLAUSE 3, ARTICLE 46 OF DECREE NO. 152/2006/NĐ-CP DATED DECEMBER 22, 2006.

l. OTHER EXPENSES (IF ANY).

2. THE COMPULSORY HEALTH INSURANCE FUND AND VOLUNTARY HEALTH INSURANCE FUND ARE USED TO COVER MEDICAL EXPENSES FOR HOLDERS OF HEALTH INSURANCE CARDS OR MEDICAL TREATMENT VOUCHERS AS PROVIDED BY CURRENT NATIONAL LAWS.

THE VIETNAM SOCIAL INSURANCE SHALL GUIDE LOCAL SOCIAL INSURANCE BRANCHES TO COOPERATE WITH MEDICAL FACILITIES TO SETTLE MEDICAL EXPENSES AND USE THE MEDICAL FUND IN ACCORDANCE WITH THE LAW.

IV. EXPENSES FOR THE MANAGEMENT OF THE VIETNAM SOCIAL INSURANCE SYSTEM

1. FUNDS FOR THE MANAGEMENT OF THE VIETNAM SOCIAL INSURANCE SYSTEM ARE DRAWN FROM THE PROFITS OF THE SOCIAL INSURANCE FUND'S INVESTMENT ACTIVITIES.

2. THE BUDGET FOR MANAGEMENT EXPENSES OF THE VIETNAM SOCIAL INSURANCE SYSTEM IS ESTABLISHED BASED ON THE TASKS OF COLLECTING AND SPENDING SOCIAL INSURANCE AND HEALTH INSURANCE FUNDS AND THE STAFFING LEVELS ASSIGNED BY THE PRIME MINISTER AT EACH PERIOD. REGULAR EXPENSES ARE CALCULATED BASED ON STAFFING LEVELS AND THE EXPENSE LIMITS FOR CENTRAL ADMINISTRATIVE AGENCIES; SPECIAL REGULAR EXPENSES ARE CALCULATED BASED ON TASKS ASSIGNED AND CURRENT EXPENSE LIMITS. BEFORE JULY 20TH EACH YEAR, THE VIETNAM SOCIAL INSURANCE SHALL PREPARE A MANAGEMENT EXPENSE BUDGET (ATTACHED AS AN ANNEX) AND SUBMIT IT TO THE SOCIAL INSURANCE MANAGEMENT BOARD FOR REVIEW PRIOR TO SUBMITTING TO THE MINISTRY OF FINANCE FOR COMBINED REVIEW AND SUBMISSION TO THE PRIME MINISTER FOR APPROVAL.

3. DURING THE YEAR, IF THE VIETNAM SOCIAL INSURANCE EXCEEDS ITS COLLECTIVE TASKS AS ASSIGNED BY THE PRIME MINISTER (AFTER EXCLUDING OBJECTIVE FACTORS SUCH AS INCREASED COLLECTION DUE TO WAGE INCREASES OR CHANGES IN CONTRIBUTION RATES), THE BUDGET WILL BE ADJUSTED TO COVER THE ACTUAL INCREASE IN MANAGEMENT EXPENSES. THESE INCREASES INCLUDE EXPENSES FOR SOCIAL INSURANCE AND HEALTH INSURANCE COLLECTION, PRINTING AND DISTRIBUTION OF SOCIAL INSURANCE BOOKS AND HEALTH INSURANCE CARDS, TRANSPORTATION AND SECURITY OF FUNDS, AND SUPPORT FOR THE SOCIAL INSURANCE ACTIVITIES OF THE MINISTRIES OF DEFENSE AND PUBLIC SECURITY AND THE GOVERNMENT COMMUNICATIONS SERVICE.

THE VIETNAM SOCIAL INSURANCE SHALL PREPARE A MANAGEMENT EXPENSE BUDGET BASED ON THE INCREASE IN COLLECTION AND SUBMIT IT TO THE MINISTRY OF FINANCE FOR REVIEW AND SUBMISSION TO THE PRIME MINISTER FOR APPROVAL TO INCREASE THE BUDGET FOR THE VIETNAM SOCIAL INSURANCE.

4. WITHIN THE TOTAL BUDGET ALLOCATED (INCLUDING ANY INCREASED BUDGET DUE TO EXCEEDING COLLECTION TASKS), THE GENERAL DIRECTOR OF THE VIETNAM SOCIAL INSURANCE SHALL DEVELOP INTERNAL EXPENSE REGULATIONS IN ACCORDANCE WITH NATIONAL EXPENSE LIMITS AND SUBMIT THEM TO THE SOCIAL INSURANCE MANAGEMENT BOARD FOR APPROVAL TO IMPLEMENT UNIFORMLY AND TRANSPARENTLY ACROSS THE ENTIRE SYSTEM.

5. THE VIETNAM SOCIAL INSURANCE SHALL IMPLEMENT MEASURES TO OPTIMIZE LABOR, REDUCE STAFFING LEVELS, AND REDUCE MANAGEMENT EXPENSES. FUNDS SAVED SHALL BE USED IN ACCORDANCE WITH CLAUSE 4, ARTICLE 14 OF DECISION NO. 41/2007/QĐ-TTg DATED MARCH 29, 2007, OF THE PRIME MINISTER ON FINANCIAL MANAGEMENT FOR THE VIETNAM SOCIAL INSURANCE.

6. BASED ON THE TOTAL FUNDS SAVED, THE GENERAL DIRECTOR OF THE VIETNAM SOCIAL INSURANCE SHALL DETERMINE THE AMOUNT OF ADDITIONAL SALARIES FOR STAFF BASED ON PERFORMANCE AND QUALITY OF WORK, ENSURING FAIRNESS AND REASONABILITY; ISSUE REGULATIONS ON THE ESTABLISHMENT AND USE OF FUNDS FOR REWARDS, WELFARE, STABILIZATION, AND DEVELOPMENT TO IMPLEMENT UNIFORMLY AND TRANSPARENTLY ACROSS THE ENTIRE SYSTEM.

V. INVESTMENT ACTIVITIES OF THE SOCIAL INSURANCE FUND.

1. The Vietnam Social Security may use temporarily idle funds from the Social Insurance Fund to implement investment measures for growth.

2. The Social Insurance Fund's investment activities shall be carried out in accordance with Clause 2 and 3 of Article 11 of Decision No. 41/2007/QĐ-TTg dated March 29, 2007 of the Government Prime Minister.

3. The profits from the Social Insurance Fund's investment activities shall be used as follows:

- To cover the management costs of the Vietnam Social Security system in accordance with regulations.

- To invest in construction, equip infrastructure, and develop information technology according to approved projects and plans annually assigned by the Prime Minister.

+ The procedures and processes for implementing basic construction projects and information technology development projects shall comply with the Construction Law dated November 26, 2003; Government Decree No. 16/2005/NĐ-CP dated February 7, 2005 on project management for construction works; and Government Decree No. 112/2006/NĐ-CP dated September 29, 2006 amending and supplementing certain articles of Government Decree No. 16/2005/NĐ-CP.

+ The planning, allocation, review of allocation, and payment of investment capital shall be carried out in accordance with Circular No. 27/2007/TT-BTC dated April 3, 2007 of the Ministry of Finance guiding the management and payment of investment capital and operational funds with investment characteristics from state budget sources.

- The remainder shall be replenished into the Social Insurance Fund at corresponding surplus rates of each component fund.

4. Investment activities of the Social Insurance Fund must be accounted for and reported in accordance with the accounting regulations for social insurance issued by the Minister of Finance.

Annually, along with the report on the management and use of the mandatory Social Insurance Fund (as stipulated in Article 46 of Government Decree No. 152/2006/NĐ-CP dated December 22, 2006) and the Health Insurance Fund, the Vietnam Social Security shall report on the investment situation of the Social Insurance Fund and the Health Insurance Fund, the balance of the Social Insurance Fund and the Health Insurance Fund, the amount currently invested, interest earned, use of interest, and the next year's investment plan to the Management Council for review, to be submitted to the Ministry of Finance for consideration and consolidation to be reported to the Prime Minister.

VI. Responsibilities of social security agencies at all levels in managing the Social Insurance Fund.

1. Vietnam Social Security:

a) Guide subordinate social security agencies in preparing budgets and final accounts for social insurance and health insurance revenues and expenditures, management costs, and construction investments in accordance with current regulations.

b) Annually prepare budgets for social insurance and health insurance revenues and expenditures, management costs, basic construction investments, and growth fund investments to be reviewed by the Vietnam Social Security Management Council, then submitted to the Ministry of Finance for consideration and consolidation to be reported to the Prime Minister.

c) Based on the Prime Minister's decision on budget allocation, current systems and standards, and the tasks of units, the General Director of the Vietnam Social Security decides on the allocation of social insurance revenue and expenditure budgets and the level of support for management costs for the Social Security of the Ministry of Public Security, the Social Security of the Ministry of National Defense, and the Social Security of the State Cryptographic Administration; allocates social insurance and health insurance revenue and expenditure budgets, management costs, and infrastructure construction and equipment costs for provincial social security agencies under the direct central administration to ensure that the budget allocations for social security agencies at various levels and sectors do not exceed the total approved budget.

d) Allocate sufficient and timely funds according to the approved budget to provincial social security agencies, the Social Security of the Ministry of Public Security, the Social Security of the Ministry of National Defense, and the Social Security of the State Cryptographic Administration and other secondary budget units to carry out their tasks.

đ) Review and notify the results of annual revenue and expenditure final account reviews of subordinate social security agencies, compile reviewed final account data to be submitted to the Vietnam Social Security Management Council for approval and sent to the Ministry of Finance in accordance with current regulations.

e) Organize the collection of social insurance and health insurance, issue and record social insurance books, and unified health insurance card forms throughout the sector.

g) Supervise the operations of subordinate social security agencies in terms of:

- Compliance with social insurance and health insurance revenue and expenditure systems.

- Implementation of statistical and accounting systems and reporting.

h) Handle violations related to social insurance and health insurance revenue and expenditure in accordance with national regulations.

i) Annually report the management and use of the Social Insurance Fund to the Management Council for review, to be submitted to the Ministry of Finance for consideration and consolidation to be reported to the Prime Minister for submission to the National Assembly.

2. Provincial Social Security Agencies:

a) Annually prepare budgets for social insurance and health insurance revenues and expenditures, management costs, and infrastructure construction costs to be sent to the Vietnam Social Security.

b) Urge units within its jurisdiction (according to the division of management) to fully and timely collect social insurance and health insurance premiums. Issue and record social insurance books for workers and health insurance cards for eligible individuals as prescribed.

c) Allocate funds according to the approved budget to county-level social security agencies.

d) Review and notify the results of quarterly and annual final account reports from county-level agencies, compile and prepare quarterly and annual final account reports to be sent to the Vietnam Social Security.

đ) Supervise and inspect social insurance and health insurance revenue and expenditure, handle violations related to social insurance and health insurance revenue and expenditure within the local area according to the division of responsibilities of the Vietnam Social Security.

3. County Social Security Agencies:

a) Annually prepare plans for social insurance and health insurance revenues and expenditures, and management costs to be sent to the provincial social security agency.

b) Urge units within its jurisdiction (according to the division of management) to fully and timely collect social insurance and health insurance premiums. Issue and record social insurance books and health insurance cards for workers and social insurance cards for eligible individuals as prescribed.

c) Manage social insurance and health insurance, management costs, and personnel in accordance with established regulations.

d) Organize payments to beneficiaries of social insurance and health insurance in a safe, full, and timely manner.

đ) Regularly inspect and supervise payment activities of grassroots units, recover improperly paid amounts, and report to higher-level social security agencies.

e) Prepare quarterly and annual settlement reports on social insurance and health insurance revenues and expenditures, and management expenses for submission to the provincial Social Insurance.

4. The time for preparing the budget estimates for revenues and expenditures at all levels of Social Insurance as stipulated in points 2 and 3 of Section VI above shall be prescribed by the Vietnam Social Security to ensure consistency with the time for preparing the State Budget Estimates in accordance with the Law on State Budget.

PART III

IMPLEMENTATION

1. This Circular shall take effect fifteen days from the date of publication in the Official Gazette, replacing the following consolidated documents:

- Circular No. 49/2003/TT-BTC dated May 16, 2003, guiding the financial management regulations for the Vietnam Social Security;

- Circular No. 61/2005/TT-BTC dated August 4, 2005, guiding amendments and supplements to Circular No. 49/2003/TT-BTC dated May 16, 2003, of the Ministry of Finance regarding the financial management regulations for the Vietnam Social Security.

Any previous provisions that conflict with the contents prescribed in this Circular shall cease to be effective.

2. The sickness and maternity fund; the occupational accident and occupational disease fund remaining prior to the effective date of the Law on Social Insurance shall continue to be implemented for payment to social insurance participants in accordance with the provisions of the Law on Social Insurance and related guiding documents.

3. The Vietnam Social Security shall guide all levels of Social Insurance to implement the contents prescribed in this Circular accurately. In the course of implementation, if there are any difficulties, they are requested to report to the Ministry of Finance for consideration and resolution./.