Fair regulation

The Ministry of Interior 's proposal to increase pensions by 8% from July 1, 2026, is receiving significant public attention because it is not just a technical adjustment but also touches on a fundamental social security issue: can retirees live stably on their income?

According to the draft, pension and allowance rates will be adjusted upwards by 8% based on the June 2026 figures. Simultaneously, the policy adds a "bottom-up" mechanism: those receiving less than 3.5 million VND/month will receive an additional 300,000 VND, while those receiving between 3.5 million and under 3.8 million VND will have their allowance raised to a minimum of 3.8 million VND/month. This is a noteworthy new point, demonstrating an effort to support vulnerable groups within the system.

From a policy perspective, choosing a single 8% increase across the board instead of multiple options as before simplifies implementation and creates transparency. However, this proportional approach also creates a paradox: those receiving higher benefits will continue to see larger increases in absolute terms, while those receiving lower benefits, despite additional support, will find it difficult to significantly improve their living standards.

In reality, most previous pension adjustments have been aimed at compensating for inflation, preserving the value of income in the face of economic fluctuations. This 8% increase is no exception to that trend.

This is necessary but not sufficient. For many long-term retirees, especially those who retired before 1995, an income of a few million dong per month is still only enough for minimum expenses, and may even be insufficient when medical costs or the cost of living in increasingly expensive urban areas arise. The issue, therefore, is not just about the percentage increase, but whether retirees can live on their pensions after the increase.

One approach worth considering is shifting from a uniform adjustment mindset to a system-wide, shared approach. Instead of a uniform 8% increase, the increase could be tiered: lower pensioners would receive a higher increase, middle pensioners would see their pensions remain unchanged, and high pensioners would receive a smaller increase. This is the principle of "reverse progression," helping to narrow the gap while maintaining the contribution-benefit framework of social insurance.

Simultaneously, establishing a truly effective pension floor also needs to be considered. The current level of 3.8 million VND is only the beginning. In the long term, this floor should be linked to the urban poverty line or the minimum cost of living and automatically adjusted according to price fluctuations. This would eliminate the need for pensioners to wait for policy adjustments to improve their lives.

A more sustainable approach is to increase non-cash support. For low-income pensioners, reduced healthcare costs, preferential public service rates, or housing assistance are more practical than simply increasing their income by a few hundred thousand dong. Social security is not measured solely by money, but by the ability to ensure a quality of life.

Pensions are not just a matter for those who have retired, but also a matter of trust for those currently working. If the system fails to guarantee a minimum standard of living in old age, trust in social security will be affected. Conversely, a policy that is equitable, reasonable, and humane will strengthen the foundation of long-term social security.

The proposed 8% pension increase is a necessary step in the current context. However, to achieve the larger goal of a livable pension, the policy needs to go a step further: from technical adjustments to equitable regulation.

According to VINH TUNG (NLDO)

Source: https://baogialai.com.vn/dieu-tiet-cong-bang-post585748.html