(Yeni) – Many people are interested in who will receive a higher pension from July 1?
Subjects whose pensions will be increased from July 1
Regarding the implementation of salary policy, the National Assembly resolved, from July 1, 2024, to implement overall salary policy reform according to Resolution 27-NQ/TW of 2018 of the Seventh Conference of the Central Executive Committee. class XII; Adjust pensions, social insurance benefits, monthly benefits, preferential benefits for meritorious people and a number of social security policies that are tied to the base salary.
The Ministry of Labor, War Invalids and Social Affairs has developed a plan to adjust pensions, dividing them into 3 groups of subjects.
Subjects whose pensions will be increased from July 1
The first group are regular retirees. For this group, the Ministry said, the pension increase will be calculated reasonably between the working area and retirees, and harmonized between people in the same position before and after July 1, 2024.
For the group of people retiring before July 1, 2024, the State needs to apply compensation to reduce the salary difference between retirees before and after the salary policy reform.
In addition to applying social insurance policies, those who receive salary according to the budget when retiring are guaranteed full benefits like normal retirees.
Third, for the group retiring before 1995, there will be special policies to push pensions even higher.
Thus, for the group retiring before 1995, it is expected that there will be special policies to push pensions even higher when reforming wages.
According to current legal regulations, the case of applying the pension calculation method according to Article 56 of the 2014 Law on Social Insurance is guided by Article 7 of Decree 115/2015/ND-CP as follows:
Monthly pension level = Monthly pension rate x Average monthly salary paid for social insurance.
In particular, the average monthly salary paid for social insurance for people participating in compulsory social insurance will depend on the monthly salary paid for social insurance of the employee and multiplied by the price inflation coefficient. (or the monthly salary adjustment coefficient for social insurance payment) corresponding to each year.
Regarding the average monthly salary paid for social insurance, it is implemented according to the provisions of Article 62 of the Law on Social Insurance 2014, Article 9 of Decree 115/2015/ND-CP, Article 20 of Circular 59/2015/TT- MOLISA.
Note, the lowest monthly pension of employees participating in compulsory social insurance who are eligible to receive pension according to regulations is equal to the base salary.
When salary reform will eliminate the base salary, the lowest pension level received will also change. This change is in the spirit of Resolution 27-NQ/TW of 2018 to ensure the lives of salary earners and their families, and implement social progress and justice.
Wage reform leads to many changes
In addition, from July 1, there will be some policy changes as follows:
Change the way to calculate minimum pension
Clause 5, Article 56 of the 2014 Law on Social Insurance stipulates that the lowest pension level when participating in compulsory social insurance is equal to the base salary.
Currently, the base salary is 1.8 million VND, so the lowest pension is 1.8 million VND/month.
However, from July 1, 2024, the abolition of the base salary has paved the way for a new mechanism in determining pension benefits. The Government will issue specific regulations or instructions on how to determine the lowest pension level.
This marks a turning point in social security policy management, reflecting the Government’s efforts to reform and optimize the social insurance system.
Adjust social insurance benefits and monthly benefits
According to the 2014 Social Insurance Law, social insurance benefits are calculated based on the base salary. For example, one-time allowance for childbirth, postpartum convalescence allowance, post-illness convalescence allowance, funeral allowance, and monthly survivor allowance.
When implementing salary reform, the salary coefficient and base salary no longer exist. Accordingly, the above mentioned social insurance benefits will also change. Pursuant to Resolution No. 104/2024, these subsidies will be increased from July 1, 2024. Currently, the Government is proposing subsidies tied to the base salary equal to the current highest level and set in a specific amount. Accordingly, the expected postpartum and sickness allowance is 540,000 VND/day; One-time allowance when giving birth is 3.6 million VND/child…
These changes were made in the context of salary reform, where the salary coefficient and base salary are no longer the basis for calculating benefits. Instead, the Government will propose to regulate subsidies tied to the base salary in a specific amount, to ensure benefits for workers.
Change the social insurance price inflation coefficient
The social insurance price slippage coefficient in 2024, implemented according to Circular No. 01/2023/TT-BLDTBXH, affects both compulsory and voluntary social insurance participants. Although the change in the social insurance price inflation coefficient from 2023 to 2024 has not been specifically announced, if it increases, it will lead to a corresponding increase in regimes such as one-time social insurance, monthly pensions, and subsidies. One-time retirement and one-time death benefit. This not only contributes to improving workers’ rights but also reflects the flexibility and sensitivity of policies to economic fluctuations.
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