The proposed increase is 4% lower than the figure of 15% the MoLISA had previously suggested. It was made after receiving ideas from the Ministry of Justice and Vietnam Social Security.
According to the MoLISA, the pension is adjusted based on the increase of the consumer price index and economic growth as well as in line with the capacity of the state budget and the social insurance fund.
The latest adjustment of the pension was in 2019, the ministry said. Since then, the consumer price index has increased by 10.3% while the average GDP has risen by 5.5% per year. Thus, the adjustment should be 15%.
However, in the context of the COVID-19 pandemic, the Government needs to prioritise financial resources for pandemic prevention and control, so the ministry proposed increasing the allowances by only 11%.
Under the proposal, those who have a monthly allowance of VND 2.3 million (US$ 100) and below will receive an additional VND 200,000 each per month, while those whose monthly allowances are between VND 2.3 million and under VND 2.5 million will get an additional allowance to make their total VND 2.5 million each per month.
It is expected that about 318,000 people will be subject to additional adjustment, with a budget of about VND 573 billion in 2022.
According to the MoLISA, nearly 3 million people will benefit from the scheme covered by the social insurance fund and the state budget, with a total increase in the payment fund in 2020 will be VND19.3 trillion (US$843 million).
