Vietnam enacts new social insurance law effective 1 July

The changes aim to increase long-term participation.

Under Vietnam’s new Social Insurance Law, effective 1 July, workers who stop participating in social insurance may claim a lump-sum payout only if they meet specific conditions. 

The changes aim to increase long-term participation in the social insurance system and encouraging workers to opt for pensions instead of lump-sum payments.

These include reaching retirement age with less than 15 years of contributions, emigrating from Vietnam, suffering from serious illnesses such as cancer or AIDS, experiencing a work capacity reduction of 81% or more, or having a severe disability. 

Workers who, before the law takes effect, have paid compulsory social insurance for under 20 years and do not join the voluntary scheme within 12 months may also qualify.

For workers who choose to reserve their contribution period and continue with the scheme, the law offers several incentives. 

These include eligibility for higher benefits, relaxed pension requirements, health insurance coverage during pension years, and monthly allowances for those who fall short of pension criteria. 

During the period of receiving these monthly allowances, the state will also cover health insurance costs.