In 2016, older persons over 65 years of age made up approximately 7 per cent of the population of Viet Nam and face relatively a high incidence of poverty at approximately 22 per cent. With this vulnerability as a growing concern, the Government of the Socialist Republic of Viet Nam adopted reforms to the old age pension schemes in 2007 with the law of social insurance and the social pension scheme in order to extend coverage to the entire working-age population. The Ministry of Labour, War Invalids and Social Affairs (MoLISA) is responsible for implementing the social pension scheme and Viet Nam Social Security is responsible for the implementation of an Old Age Pension (OAP).
Viet Nam’s social pension for older persons is a targeted scheme for those who are poor and facing vulnerability. Benefits under the scheme are available to those between 60 and 79 years of age who live alone, live with an elderly spouse without the support of relatives, or are disabled. All older persons over the age of 80 years who do not receive a pension or monthly social insurance allowances are entitled to claim a social pension allowance under this scheme. Those eligible are entitled to receive a minimum benefit of VND 270,000, or USD 12 per month with benefits increasing up to VND 405,000, or USD 19 per month for those with severe disabilities. In 2014 the OAP reached approximately 16 per cent of older persons. The OAP is a mandatory contributory pension requiring monthly contributions of 22 per cent of the employee’s salary, of which 8 per cent is shared by the employee and 14 per cent by the employer. The OAP is also available on a voluntary basis for self employed persons with a contribution of 20 per cent of monthly salary. Those who contributed for a minimum of 20 years can begin claiming monthly transfers at the age of 60 for men and 55 for women. Those who have worked in arduous conditions can claim their pension as early as 55 years of age for men and 50 years of age for women. The OAP provides a monthly pension not lower than the minimum wage, up to a maximum level 15 times higher than minimum wage. In 2014 approximately 10 per cent of older persons received the OAP.
Viet Nam’s pension system is supported by a legal framework, strengthened with the passing of the Law on the Elderly in 2009 which increased levels of coverage available under the targeted pension. While the extent of coverage has also increased, some gaps in coverage remain, which may be linked to practical definitions of poverty and disability. Nonetheless, steps to standardize the pension system, making it more widely available, represent an important investment in the national social protection floor and ensure that increasing numbers of older persons in Viet Nam have access to basic income security.
Further Reading:
- Giang, T.L. and D. Wesumperuma (2012). Social Pensions in Viet Nam: Status and Recommendations for Policy Responses. In S. Handayani and B. Babajanian, eds. Social Protection for Older People in Asia. Asian Development Bank, Manila: pp. 168-184.