Two options for withdrawing social insurance benefits in a lump sum have been submitted to the National Assembly.

Acting on behalf of the Prime Minister , the Minister of Labour, Invalids and Social Affairs, Dao Ngoc Dung, signed the Government's submission on the draft Law on Social Insurance (amended).

In the draft Law on Social Insurance (amended), the Government reported and sought the National Assembly's opinion on two options for withdrawing social insurance benefits in a lump sum.

Specifically, regarding lump-sum social insurance payments, the submission clearly states that Resolution 28-NQ/TW sets out appropriate regulations to reduce the number of lump-sum social insurance payments by increasing benefits for those who retain their social insurance participation period to receive retirement benefits, and reducing benefits for those who receive a lump-sum payment.

In practical terms, after 7 years of implementing the 2014 Social Insurance Law, the total number of people receiving a lump-sum social insurance payment was approximately 4.5 million, of which nearly 1.3 million people returned to the labor market and continued to participate in social insurance after receiving the lump-sum payment, accounting for nearly 28% of the total number of people receiving a lump-sum social insurance payment during the 2016-2022 period.

Regarding proposed amendments, the draft Social Insurance Law (amended) includes many revisions and additions aimed at increasing benefits, enhancing attractiveness, and encouraging workers to preserve their contribution period to receive a pension instead of receiving a lump-sum social insurance payment, thus making the conditions for receiving a pension easier (reduced from 20 years to 15 years). Workers will receive a monthly allowance if they have contributed to social insurance but do not meet the conditions for receiving a pension and are not yet old enough to receive social retirement benefits. They will also receive health insurance covered by the state budget during the period of receiving the monthly allowance. Furthermore, unemployed workers who are currently without a job will also receive credit support to address their immediate financial difficulties.

Regarding regulations on receiving a lump-sum social insurance payment, the draft Law proposes two options in point d, clause 1, Article 70.

Option 1 stipulates the entitlement to a lump-sum social insurance payment for two different groups of workers.

Group 1: For workers who participated in social insurance before the amended Social Insurance Law came into effect, after 12 months of unemployment and not yet having contributed to social insurance for 20 years, they are entitled to receive a lump-sum social insurance payment if they so wish.

Essentially, this regulation inherits Resolution 93/2015/QH13, which allows employees to choose between preserving their social insurance participation period to receive benefits or receiving a lump-sum social insurance payment if needed. However, the difference this time is that if the employee chooses to preserve their social insurance participation period and not receive a lump-sum payment, they will be entitled to additional benefits. If the employee chooses to receive a lump-sum payment, they will lose the opportunity to receive the aforementioned additional benefits.

Group 2: For workers who started participating in social insurance from the effective date of the amended Social Insurance Law (expected July 1, 2025), they are not eligible to receive a lump-sum social insurance payment (lump-sum social insurance benefits are only granted in the following cases: reaching retirement age but not having enough years of contributions to receive a pension; emigrating abroad to settle; or suffering from one of the life-threatening diseases as stipulated in Article 60 of the current Social Insurance Law).

The advantage of this approach is that it gradually overcomes the problem of receiving a lump-sum social insurance payment that has existed in the past, in accordance with the spirit of Resolution 28-NQ/TW.

According to recent statistics, with this approach, the number of people receiving lump-sum social insurance benefits will not decrease significantly in the early years, but the decrease will increase in subsequent years. From the fifth year onwards, the decrease will be rapid, potentially reducing the number of lump-sum social insurance benefits by more than half compared to the previous period. This will move towards international standards and practices, helping workers to maximize their long-term benefits when they reach retirement age, contributing to a stable life in old age.

In the short term, this option does not help maintain or increase the number of participants in social insurance as much as option 2, but in the long term, this option is more optimal.

Since this regulation does not affect workers who are already participating in social insurance, it will be easier to gain the support of workers.

The drawback of this option is that, because it only applies to workers who started participating in social insurance from the date this Law came into effect, more than 17.5 million workers currently participating in social insurance still have the right to choose to receive a lump-sum social insurance payment.

Therefore, the number of people receiving a lump-sum social insurance payment did not decrease significantly, especially in the first few years after the new law came into effect. At the same time, it created a comparison between workers who participated before and after the law came into effect regarding their eligibility for a lump-sum social insurance payment.

Option 2: "After 12 months of not being subject to mandatory social insurance, not participating in voluntary social insurance, and having contributed to social insurance for less than 20 years, if the employee requests it, they may receive partial benefits, but not exceeding 50% of the total time contributed to the retirement and death benefit fund. The remaining social insurance contribution period will be preserved for the employee to continue participating in and receiving social insurance benefits."

The advantage of this approach is that it ensures compliance with the spirit of Resolution 28-NQ/TW. It harmonizes the immediate interests of workers with long-term social security policies.

Although the number of people receiving a lump-sum social insurance payment may not decrease significantly compared to the current situation, when workers receive a lump-sum payment, they do not completely leave the system because they still retain a portion of their remaining contribution period (without affecting the number of participants); when workers continue to participate, their contribution period will be added together to receive higher social insurance benefits; workers will have more motivation to continue participating and accumulating contributions to qualify for a pension; and workers will have more opportunities to qualify for a pension when they reach retirement age. This option both meets the current demand for lump-sum social insurance payments and ensures the stability of the system and the long-term rights of workers.

The drawback is that the issue of withdrawing social insurance contributions in a lump sum according to international standards and practices has not been fully resolved. Workers who have already completed part of their contribution period can only retain a portion of their remaining contribution period, which will affect their eligibility for social insurance benefits (due to the short contribution period) if they continue to participate.

Workers are not eligible for a lump-sum social insurance payment covering their entire contribution period, leading to a perceived reduction in immediate benefits. Furthermore, this could result in an increase in workers requesting lump-sum payments before the law takes effect. In addition, this approach suggests that the practice of receiving lump-sum payments at a young age (before retirement age) will continue in the future.

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