CIRCULAR

PRESCRIBING INDEXATION RATE OF MONTHLY SALARY AND INCOME AFTER PAYMENT OF SOCIAL INSURANCE CONTRIBUTIONS

Pursuant to the Government’s Decree No. 14/2017/ND-CP dated February 17, 2017 defining the functions, tasks, powers and organizational structure of the Ministry of Labour, War Invalids and Social Affairs;

Pursuant to the Government’s Decree No. 115/2015/ND-CP dated November 11, 2015 providing guidelines for implementation of the Law on Social Insurance with regard to compulsory insurance (hereinafter referred to as “Decree No. 115/2015/ND-CP”);

Pursuant to the Government’s Decree No. 134/2015/ND-CP dated December 29, 2015 providing guidelines for implementation of the Law on Social Insurance with regard to voluntary insurance (hereinafter referred to as “Decree No. 134/2015/ND-CP”);

At the request of the Director of Social Insurance Department;

The Minister of Labor, War Invalids and Social Affairs promulgates a Circular prescribing indexation rate of monthly salary and income after payment of social insurance contributions.

Article 1. Regulated entities   

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a) Employees who are subject to the pay scheme under the State’s regulations, started participating in social insurance programs from January 01, 2016 and earlier, have already enjoyed the one-off social insurance benefit payments, or are dead after bequeathing their relatives the right of entitlement to one-off social insurance benefit payments already received within the period from January 01, 2021 to December 31, 2021.

b) Employees who pay social insurance contributions according to the pay scheme decided by employers, receive retirement pensions or one-off allowances upon retirement, one-off social insurance benefit payments, or are dead after bequeathing their relatives the right of entitlement to one-off death insurance benefit payments received from January 01, 2021 to December 31, 2021. 

2. Persons subject to the indexation of monthly incomes after payment of social insurance contributions as provided by Clause 2 Article 4 of Decree No. 134/2015/ND-CP must be voluntary social insurance participants who are entitled to one-off payment of pensions, allowances upon retirement and social insurance benefits, or are dead after bequeathing their relatives the right of entitlement to one-off death insurance benefit payments already received from January 01, 2021 to December 31, 2021. 

Article 2. Indexation of monthly salaries after payment of social insurance contributions

1. Monthly salaries after payment of social insurance contributions of persons specified in Clause 1 Article 1 hereof shall be indexed as follows:

 Indexed monthly salary after payment of social insurance contributions in each year

=

 Total monthly salary after payment of social insurance contributions in each year

x

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In that formula, the indexation rate of monthly salary after payment of social insurance contributions in the corresponding year shall be determined, based on Table 1 given hereunder:

Table 1:

Year

Before 1995

1995

1996

1997

1998

1999

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2001

2002

2003

2004

2005

2006

2007

Indexation rate

5,01

...

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...

4,02

3,89

3,61

3,46

3,52

3,53

3,40

3,29

3,06

...

...

...

2,62

2,42

Year

2008

2009

2010

2011

2012

2013

...

...

...

2015

2016

2017

2018

2019

2020

2021

Indexation rate

1,97

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...

1,69

1,42

1,30

1,22

1,18

1,17

1,14

1,10

1,06

...

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...

1,00

1,00

2. If employees have paid social insurance contributions for periods under both the pay scheme prescribed by the State’s regulations and the pay scheme decided by employers, monthly salaries after payment of social insurance contributions of those employees who started participating in social insurance programs according to the pay scheme regulated by the State from January 01, 2016 and earlier, and monthly salaries after payment of social insurance contributions according to the pay scheme decided by employers shall be adjusted in accordance with the provisions in Clause 1 of this Article.   

Article 3. Indexation of monthly income after payment of social insurance contributions

1. Monthly income after payment of social insurance contributions of persons specified in Clause 2 Article 1 hereof shall be indexed as follows:

 Indexed monthly income after payment of voluntary social insurance contributions in each year

=

 Total monthly income after payment of social insurance contributions in each year

x

...

...

...

In that formula, the indexation rate of monthly income after payment of social insurance contributions in the corresponding year shall be determined, based on Table 2 given hereunder:

Table 2:

Year

2008

2009

2010

2011

2012

2013

...

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Indexation rate

1,97

1,84

1,69

1,42

1,30

1,22

1,18

Year

...

...

...

2016

2017

2018

2019

2020

2021

Indexation rate

1,17

1,14

...

...

...

1,06

1,03

1,00

1,00

2. If employees have both compulsory social insurance contribution period and voluntary one, the monthly income after payment of voluntary social insurance contributions shall be indexed according to Clause 1 of this Article while the monthly salary after payment of compulsory social insurance contributions shall be indexed according to the provisions in Article 10 of the Decree No. 115/2015/ND-CP and Article 2 of this Circular.  The average rate of monthly salary and income after payment of social insurance contributions which are used as a basis for calculation of retirement pensions, one-off allowances upon retirements, one-off social insurance benefit payments and one-off death insurance benefit payments as provided for in Clause 4 Article 11 of the Decree No. 115/2015/ND-CP and Clause 4 Article 5 of Decree No.134/2015/ND-CP.

Article 4. Implementation

1. This Circular comes into force from February 15, 2021; provisions of this Circular shall apply from January 01, 2021.

2. The Circular No. 35/2019/TT-BLDTBXH dated December 30, 2019 of the Minister of Labor, War Invalids and Social Affairs shall cease to take effect from the effective date of this Circular.

3. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Labour, War Invalids and Social Affairs for consideration./.

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MINISTER




Dao Ngoc Dung