Basic salary increased to 1.6 million VND, what will happen to pension?

Accordingly, from July next year, the basic salary will increase by 110,000 VND, from 1.49 million VND/month to 1.6 million VND/month, resulting in 5 policies on pensions and social insurance being adjusted, specifically:

Increase the minimum pension level

According to Clause 5, Article 56 of the Law on Social Insurance 2014, the lowest monthly pension for employees participating in compulsory social insurance is equal to the basic salary. Thus, the lowest monthly pension is 1.6 million VND/month, calculated from July 1, 2020.

Increase the payment level of 100% of the cost of medical examination and treatment under health insurance

According to Point d, Clause 1, Article 14, Decree 146/2018, when participating in health insurance, the health insurance fund will pay 100% of the cost for medical examination and treatment in cases where the cost for one medical examination and treatment is lower than 15% of the basic salary.

The lowest pension will increase according to the basic salary from July 1 next year.

Increase the "ceiling" of 20 months of compulsory social insurance payments

According to Clause 3, Article 6 of Decision 595/QD-BHXH, if the salary for social insurance contribution is higher than 20 months of basic salary, the maximum monthly salary for compulsory social insurance contribution is equal to 20 months of basic salary.

Thus, after July 1, 2020, the maximum ceiling for compulsory social insurance contributions will be: 32 million VND (ie 20 x 1,600,000 VND = 32,000,000 VND)

Increase the maximum health insurance contribution level

According to Clause 2, Article 18 of Decision 595/QD-BHXH, part-time workers in communes, wards and towns have a monthly health insurance contribution equal to 4.5% of the basic salary, of which the Commune People's Committee contributes 3%; employees contribute 1.5%.

Thus, the above health insurance contribution level for employees from July 1, 2020 will be: 1.5 x 16,000,000 VND = 24,000 VND/month.

Increase health insurance premiums for family members

According to Point e, Clause 1, Article 7 of Decree 146/2018/ND-CP, the family health insurance contribution level is as follows:

The first person pays 4.5% of the basic salary; the second, third, and fourth people pay 70%, 60%, and 50% of the first person's contribution, respectively; from the fifth person onwards, the contribution is 40% of the first person's contribution.

Thus, from July 1, 2020, the contribution level of the first person will increase to 72,000 VND/month (ie 4.5 x 1,600,000 VND = 72,000 VND). At the same time, the contribution level of the remaining people will also increase accordingly.