Circular No. 89/2005/TT-BTC guiding the determination of needs, sources, and methods of expenditure to implement adjustments to the minimum wage level for cadres, civil servants, public officials, armed forces, and allowances for retired village cadres in 2005-2006.

CIRCULAR

Guidelines for determining needs, sources, and methods of expenditure to implement adjustments to the minimum wage level for cadres, civil servants, public officials, armed forces personnel, and adjustments to allowances for village cadres who retired in 2005 and 2006

Adjustments to the minimum wage level for cadres, civil servants, public officials, and armed forces personnel

Adjustments to allowances for village cadres who retired in 2005 and 2006

officers of the commune who retired in 2005, 2006

Pursuant to Decree No. 118/2005/NĐ-CP dated September 15, 2005 of the Government adjusting the minimum wage level;

Pursuant to Decree No. 119/2005/NĐ-CP dated September 27, 2005 of the Government on adjusting allowances for village cadres who retired according to Decision No. 130/CP dated June 20, 1975 of the Council of Ministers, Decision 111/HĐBT dated October 13, 1981 of the Council of Ministers,

The Ministry of Finance guides the determination of needs, sources, and methods of expenditure to implement adjustments to the minimum wage level for cadres, civil servants, public officials, and armed forces personnel in 2005 and 2006 as stipulated in Decree No. 118/2005/NĐ-CP dated September 15, 2005 of the Government adjusting the minimum wage level and Decree No. 119/2005/NĐ-CP dated September 27, 2005 of the Government on adjusting allowances for village cadres who retired according to Decision No. 130/CP dated June 20, 1975 of the Council of Ministers, Decision 111/HĐBT dated October 13, 1981 of the Council of Ministers (hereinafter referred to as Decree No. 118/2005/NĐ-CP and Decree No. 119/2005/NĐ-CP) as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. This Circular stipulates the determination of needs, sources, and methods of expenditure to implement adjustments to the minimum wage level according to Decree No. 118/2005/NĐ-CP for state agencies, state-owned public institutions; units under the armed forces; Party agencies, political-social organizations, and occupational-political social organizations, social organizations, occupational-social organizations, non-governmental organizations, projects, and international organizations located in Vietnam with cadres, civil servants, and public officials assigned by the State to work within the state budget and receiving salaries from the state budget according to the salary scale prescribed by the State and allowances for retired village cadres.

2. Based on the provisions of Decree No. 118/2005/NĐ-CP, Decree No. 119/2005/NĐ-CP, ministries, ministerial-level agencies, government agencies, and other central agencies (hereinafter referred to as ministries and central agencies) and provincial-level municipalities directly under the Central Government have the responsibility to organize, guide, and compile the financial requirements and sources of funds to implement adjustments to the minimum wage level and allowances for retired village cadres of their agencies, units, and subordinate levels to be submitted to the Ministry of Finance in accordance with specific provisions of this Circular.

3. Ministries and central agencies, People's Committees at all levels, budgetary units at all levels, and budget users have the responsibility to determine and allocate sources to implement adjustments to the minimum wage level and the budget support (if any) to pay new salaries to cadres, civil servants, and public officials of their units and allowances for retired village cadres in accordance with regulations and the provisions of this Circular.

4. Implementation, accounting, and settlement of funds for adjustments to the minimum wage level and allowances for retired village cadres shall be carried out in accordance with the prescribed regulations and specific provisions of this Circular.

II. SPECIFIC PROVISIONS

1. Regarding the determination of financial needs to implement adjustments to the minimum wage level and adjustments to allowances for retired village cadres:

a) The total number of cadres, civil servants, and public officials to determine the financial needs to implement adjustments to the minimum wage level is the actual number present at the reporting time (the number present on September 30, 2005 for the 2005 report; the number present on January 1, 2006 for the 2006 report) and does not exceed the total number of positions allocated or approved by the competent authority. For additional positions added in 2005 and 2006 compared to the number of positions at the reporting time, if within the total number of positions allocated or approved by the competent authority, the financial needs to implement adjustments to the minimum wage level for these positions will be included in the financial needs for the next round of salary reform in 2006 (if applicable) or will be specifically considered and resolved in the fourth quarter of 2006. For positions exceeding the total number of positions allocated (or approved), the increased financial needs due to adjustments to the minimum wage level for these positions will be self-funded by the agency or unit from available funds in accordance with the law; they will not be included in the increased financial needs due to adjustments to the minimum wage level for ministries and central agencies and provincial-level municipalities directly under the Central Government.

The specific total number of positions allocated or approved by the competent authority for ministries and central agencies and provincial-level municipalities directly under the Central Government is determined similarly to the provisions at point 1.1.1, 1.1.2 of point 1.1 clause 1 section II of Circular No. 02/2005/TT-BTC dated January 6, 2005 of the Ministry of Finance guiding the determination of needs, sources, and methods of expenditure to implement salary reforms for cadres, civil servants, public officials, and armed forces personnel (hereinafter referred to as Circular No. 02/2005/TT-BTC).

b) The additional financial requirement due to the adjustment of the general minimum wage level as stipulated in this Circular shall be determined based on the basic salary according to rank, grade, and position; the allowance according to the prescribed system (excluding night shift wages, overtime pay, and allowances in absolute amounts), and contributions under the prescribed system (social insurance, health insurance, trade union fees) and the increase in the general minimum wage level prescribed in Decree 118/2005/ND-CP compared to Decree 203/2004/ND-CP according to the number of personnel as specified above in point a). For the additional financial requirements due to the adjustment of the general minimum wage level of provinces and centrally-administered cities, it includes the additional funding for subsidies for retired village cadres as stipulated in Decree 119/2005/ND-CP; additional activity costs for People's Council representatives at all levels; additional funding for the salaries of kindergarten teachers outside the establishment quota; additional funding for the salaries of village health workers within the adjusted establishment quota; and support funds from the central budget to implement allowances for non-professional village cadres according to Circular No. 1561/TTg-KTTH dated October 12, 2005 of the Prime Minister.

c) For Ministries, central agencies, and provinces, centrally-administered cities with an increase in the number of personnel as of September 30, 2005 compared to the number of personnel present at the time of reporting the financial requirements for salary reform in 2005 as stipulated in Decree 204/2004/ND-CP (within the total number of personnel assigned or approved by the competent authority) and not yet addressed, the financial requirements for implementing salary reform as stipulated in Decree 204/2004/ND-CP for these personnel in 2005 (actual payment up to December 31, 2005) shall be consolidated into the financial requirements for implementing the adjustment of the general minimum wage level in the fourth quarter of 2005.

d) For Ministries and central agencies with an increase in the number of personnel as of December 31, 2005 compared to the number of personnel present as of September 30, 2005 (within the total number of personnel assigned or approved by the competent authority) and not yet addressed, the financial requirements for implementing salary reform as stipulated in Decree 204/2004/ND-CP for these personnel in 2005 shall be consolidated into the financial requirements for implementing the adjustment of the general minimum wage level in 2006.

For Ministries and central agencies with an increase in the number of personnel as of January 1, 2006 compared to the number of personnel present at the time of reporting the financial requirements for salary reform in 2005 as stipulated in Decree 204/2004/ND-CP (within the total number of personnel assigned or approved by the competent authority) and not yet addressed, the financial requirements for implementing salary reform as stipulated in Decree 204/2004/ND-CP for these personnel in 2006 shall be consolidated into the financial requirements for implementing the adjustment of the general minimum wage level in 2006.

The additional financial requirements for implementing salary reform as stipulated in Decree 204/2004/ND-CP in 2006 for the increased number of personnel compared to the number of personnel present as of January 1, 2006 (within the total number of personnel assigned or approved by the competent authority) of Ministries, central agencies, and provinces, centrally-administered cities that have not been addressed shall be consolidated into the financial requirements for salary reform in the next round of salary reform in 2006 (if any) or will be specifically considered and addressed in the fourth quarter of 2006.

Additional wages due to the adjustment of the general minimum wage level for employees not under the state's personnel quota allocation and whose wages are included in the unit price of products according to the regulations of public institutions operating in fields such as transportation, land administration, geology, etc.; additional wages for employees of public institutions with income that fully self-fund their regular operations; additional wages for employees of administrative agencies that have implemented personnel quotas and administrative management expenses, and public institutions with income that partially fund their regular operations; additional wages for employees in agencies and units that have implemented cost allocations (such as Tax Agencies, Customs, State Treasury, Vietnam Television, etc.) and in decisions allowing cost allocations where the competent authority has stipulated that during the allocation period, the unit must arrange within the allocation limit to ensure new policies and regulations; additional wages for personnel and employees of the trade union system at all levels: Implemented similarly to the provisions in point 1.2, Clause 1, Section II of Circular No. 02/2005/TT-BTC (not consolidated into the financial requirements for implementing the adjustment of the general minimum wage level of Ministries, central agencies, and provinces, centrally-administered cities).

Part on the salary corresponding to the minimum wage stipulated in Decree No. 03/2003/NĐ-CP dated January 15, 2003 of the Government and the salary coefficient stipulated in Decree No. 25/CP dated May 23, 1993 of the Government for additional personnel established annually by agencies and units shall be paid from the annual budget estimate allocated by the competent authority and retained income according to regulations for agencies and units; not included in the funding requirements for implementing the adjustment of the general minimum wage for ministries, central agencies, and provinces and cities directly under the Central Government.

2. On determining the sources of funds for implementing the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres:

a) Principles regarding the use of funds in 2005 and 2006 to implement the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres: Implemented similarly to the provisions at point 2.1, Clause 2, Section II of Circular No. 02/2005/TT-BTC.

b) Sources of funds in 2005 to implement the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres:

- In the case where the source for implementing the salary reform in 2005 as stipulated in item 2.2.2, Clause 2, Section II of Circular No. 02/2005/TT-BTC, after deducting the funding requirements for increased salaries as prescribed in Decree No. 204/2004/NĐ-CP, if there is a surplus:

+ If the surplus mentioned above is less than the funding requirements for increased salaries due to the adjustment of the general minimum wage in 2005 as stipulated in Section II, Clause 1 of this Circular, then the State budget will supplement the shortfall for ministries, central agencies, and provinces and cities directly under the Central Government to ensure sufficient resources for implementation.

+ If the surplus mentioned above is greater than the funding requirements for increased salaries due to the adjustment of the general minimum wage in 2005 as stipulated in Section II, Clause 1 of this Circular, then ministries, central agencies, and provinces and cities directly under the Central Government will use the surplus mentioned above to ensure funding for increased salaries due to the adjustment of the general minimum wage in 2005, with the remainder transferred to 2006 to continue implementing the adjustment of the general minimum wage as stipulated in Decree No. 118/2005/NĐ-CP in 2006 or for further salary reform in 2006 (if applicable); not to be used for other purposes.

In the case where the source for implementing the salary reform in 2005 as stipulated in item 2.2.2, Clause 2, Section II of Circular No. 02/2005/TT-BTC, after deducting the funding requirements for increased salaries as prescribed in Decree No. 204/2004/NĐ-CP, if there is no surplus: The State budget will supplement the funding requirements for increased salaries due to the adjustment of the general minimum wage in 2005 as stipulated in Section II, Clause 1 of this Circular for ministries, central agencies, and provinces and cities directly under the Central Government.

c) Sources of funds in 2006 to implement the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres:

c1) Sources of funds in 2006 to implement the adjustment of the general minimum wage for ministries, central agencies:

- Utilize at least 40% of the retained income according to regulations in 2006 (except for the health sector which is 35%, after deducting drug costs, blood, transfusions, chemicals) of agencies and units after deducting the amount already used to implement increased salaries according to the minimum wage stipulated in Decree No. 03/2003/NĐ-CP and the salary stipulated in Decree No. 204/2004/NĐ-CP based on the staffing level in 2006.

- Utilize the savings of 10% of regular expenses (excluding salaries, salary-like payments according to the salary stipulated in Decree No. 204/2004/NĐ-CP) in the 2006 budget estimate that increases compared to the 2005 budget estimate (the 2005 budget estimate includes the budget estimate allocated by the competent authority and the supplementary amount to implement increased salaries in 2005 according to the salary stipulated in Decree No. 204/2004/NĐ-CP - if applicable) for each administrative agency and public service unit.

- Unutilized sources for implementing salary reform in 2005 are carried over to 2006.

In the case where the sources as stipulated in item c1, Clause 2, Section II above are less than the funding requirements for increased salaries due to the adjustment of the general minimum wage in 2006 as stipulated in Section II, Clause 1 of this Circular, the State budget will supplement the shortfall for ministries and central agencies to ensure sufficient resources for implementation.

In the case where the sources as stipulated in item c1, Clause 2, Section II above are greater than the funding requirements for increased salaries due to the adjustment of the general minimum wage as stipulated in Section II, Clause 1 of this Circular, ministries and central agencies will self-assure the increased salaries in 2006 as stipulated in Section II, Clause 1 of this Circular; the remainder will be used to implement increased salaries when the State issues new salary regulations in 2006 or transferred to 2007 when the State continues to issue new salary regulations according to the salary reform roadmap; not to be used for other purposes.

c2) Sources of funds in 2006 to implement the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres of provinces and cities directly under the Central Government:

- Utilize the savings of 10% of regular expenses (excluding salaries, salary-like payments according to the salary stipulated in Decree No. 204/2004/NĐ-CP) in the 2006 budget estimate that increases compared to the 2005 budget estimate (the 2005 budget estimate includes the budget estimate allocated by the Prime Minister and the supplementary amount from the State Treasury to implement increased salaries in 2005 according to the salary stipulated in Decree No. 204/2004/NĐ-CP - if applicable).

- 50% of the increase in local government revenue forecast in 2006 compared to the 2005 budget estimate allocated by the Prime Minister (excluding the increase in revenue from land use fees).

- The residual amount after ensuring the funding needs for implementing Decree No. 204/2004/ND-CP in 2006 (if any) from the following sources: 50% of the increase in local budget revenue (excluding the increase from land use fees) in the 2005 budget compared to the 2004 budget as assigned by the Prime Minister; 50% of the increase in local budget revenue (excluding the increase from land use fees) in 2005 compared to the 2005 budget as assigned by the Prime Minister; 10% of the savings in regular expenditure (excluding salaries with salary characteristics) in the 2005 budget compared to the 2003 budget; 40% of the proceeds from retained public services (35% for the health sector, after deducting costs for medicines, blood, transfusions, and chemicals) of agencies and units after subtracting the amount used to implement additional salary increases according to the minimum wage stipulated in Decree No. 03/2003/ND-CP dated January 15, 2003 and the salary coefficient stipulated in Decree No. 25/CP dated May 23, 1993 based on the 2006 staffing level; the remaining funds from the implementation of additional salary increases in 2005 that were not used; the amount allocated from the State Budget in the 2006 budget to ensure additional funding according to the minimum wage stipulated in Decree No. 204/2004/ND-CP.

In cases where the sources specified in paragraph c2 point c clause 2 section II above are less than the funding needs for additional expenses due to the adjustment of the general minimum wage in 2006 as stipulated in clause 1 section II of this Circular, the central government budget will supplement the shortfall for provinces and centrally-administered cities to ensure sufficient funding for implementation.

In cases where the sources specified in paragraph c2 point c clause 2 section II above exceed the funding needs for additional expenses due to the adjustment of the general minimum wage as stipulated in clause 1 section II of this Circular, provinces and centrally-administered cities shall self-fund the additional salary increases in 2006 as stipulated in clause 1 section II of this Circular; the remainder shall be used to implement additional salaries when the state issues new salary regulations in 2006 or transferred to 2007 when the state continues to issue new salary regulations according to the salary reform schedule; this remainder shall not be used for other purposes.

3. Regarding the reporting and review system for the need and source of funding to implement the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres:

Ministries, central agencies, and provinces and centrally-administered cities have the responsibility to organize, guide, and compile reports on the need and source of funding in 2005 to implement the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres of agencies, units, and subordinate levels to send to the Ministry of Finance no later than November 15, 2005.

Ministries, central agencies, and provinces and centrally-administered cities have the responsibility to organize, guide, and compile reports on the need and source of funding in 2006 to implement the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres of agencies, units, and subordinate levels to send to the Ministry of Finance no later than January 31, 2006.

(Reports on the need and source of funding in 2005 to implement the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres: ministries and central agencies submit need reports according to form number 1, source reports according to form number 3 attached; provinces and centrally-administered cities submit need reports according to forms number 2a, 2b, 2c, 2d, source reports according to forms number 4a, 4b, 4c attached).

(Reports on the need and source of funding in 2006 to implement the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres: ministries and central agencies submit need reports according to form number 5, source reports according to form number 7 attached; provinces and centrally-administered cities submit need reports according to forms number 6a, 6b, 6c, source reports according to forms number 8a, 8b, 8c attached).

4. Regarding the method of disbursement to implement the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres:

Implemented similarly to the provisions in clause 4 section II of Circular No. 02/2005/TT-BTC; specifically, the content related to advance payment and settlement is modified and supplemented as follows:

- Provisions regarding advance payment notification are replaced by temporary allocation notification; provisions regarding advance payment implementation are replaced by temporary allocation implementation and the provisions regarding recovery of advance payment are abolished.

- Funding for implementing additional salaries due to the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres in 2005: If the disbursement procedures are completed within the time frame for adjusting the 2005 final accounts, it will be settled into the state budget for 2005; if the disbursement procedures are not completed within the time frame for adjusting the 2005 final accounts, it will be settled into the state budget for 2006. Funding for implementing additional salaries due to the adjustment of the general minimum wage in 2006 will be settled into the state budget for 2006.

III. IMPLEMENTATION:

1. Based on the provisions of this Circular, ministries, central agencies, and provincial People's Committees and centrally-administered city People's Committees have the responsibility to organize, guide agencies, units, and subordinate levels to determine the need for funding and the source of funding in 2005 and 2006 to implement the adjustment of the general minimum wage and the adjustment of allowances for retired village cadres.

Based on their specific circumstances and the provisions of this Circular, heads of ministries, central agencies, provincial People's Committees, and centrally-administered city People's Committees shall specify the time frame and report formats for units and subordinate budgets.

2. Determination, submission of reports, and review of the need for funding and implementation of increased pension payments and social insurance allowances (for those who have retired and are receiving social insurance benefits guaranteed by the state budget) and increased preferential allowances for persons with meritorious service under the Law on Persons with Meritorious Service will be guided by separate circulars.

3. This Circular takes effect 15 days after its publication in the Official Gazette. Any difficulties encountered during implementation should be reported to the Ministry of Finance for prompt resolution./.