National Assembly changes insurance law to allow lump sum payments

Monday, 2015-06-22 16:16:10
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NDO - The National Assembly has voted in favour of overturning article 60 of the Social Insurance Law, which is taking effect in 2016 and stops workers from collecting lump sum payments until they retire.

Under the resolution adopted by the legislature on June 22, workers can now choose to receive their lump-sum insurance pay-out a year after they resign from their job or wait until retirement age - 60 for men and 55 for women.

The new rule will be in effect until 2020 when the government will review and make necessary changes in accordance with the socio-economic situation and the target of expanding social security coverage.

According to the International Labour Organisation, Vietnam’s social security fund faces the risks of running a deficit by 2021 and experiencing depletion by 2034 if no reforms are made.

Article 60 of the 2014 Social Insurance Law was designed as part of those reforms but has been met with opposition from many workers, arguing that they need money to seek a new job or start their own business.