THE PRIME MINISTER OF GOVERNMENT
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No. 20/1998/QD-TTg
Hanoi, January 26, 1998
 
DECISION
TO ISSUE THE REGULATION ON THE FINANCIAL MANAGEMENT OF THE VIETNAM SOCIAL INSURANCE
THE PRIME MINISTER
Pursuant to the Law on Organization of the Government of September 30, 1992;
Pursuant to Decree No. 19-CP of February 16, 1995 of the Government on the establishment of the Vietnam Social Insurance,
At the proposals of the Minister of Finance and the Managing Board of the Vietnam Social Insurance,
DECIDES:
Article 1.- To issue together with this Decision the Regulation on the financial management of the Vietnam Social Insurance.
Article 2.- This Decision takes effect from January 1, 1998. The earlier provisions which are contrary to this Decision are now annulled.

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Article 3.- The Ministry of Finance and the Vietnam Social Insurance shall have to guide and supervise the implementation of the Regulation issued together with this Decision.
Article 4.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People's Committees of the provinces and cities directly under the Central Government of Vietnam, the Managing Board and the General Director of the Vietnam Social Insurance shall have to implement this Decision
 
FOR THE PRIME MINISTER
DEPUTY PRIME MINISTER




Nguyen Tan Dung
 
REGULATION
ON THE FINANCIAL MANAGEMENT OF THE VIETNAM SOCIAL INSURANCE
(issued together with Decision No. 20/1998/QD-TTg of January 26, 1998 of the Prime Minister
Chapter I
GENERAL PROVISIONS
Article 1.- This Regulation applies to the activities of financial management of the entire Vietnam Social Insurance system, including:
- The Vietnam Social Insurance
- The Social Insurance of the provinces and cities directly under the Central Government (hereafter collectively referred to as Provincial Social Insurance).
- The Social Insurance of the districts, provincial towns and provincial cities (hereafter collectively referred to as District Social insurance).
Article 2.- Monthly the Ministry of Finance shall provide adequate fund for the Vietnam Social Insurance to make payments to the current beneficiaries of the social insurance regimes before January 1st, 1995. The above-mentioned fund shall be separately accounted and settled in accordance with the provisions of the Law on the State Budget.
Article 3.- The social insurance fund is formed on the basis of the contributions of laborers and employers, State budget contributions and subsidies, profits from the fund preservation and development activities and other revenues. The social insurance fund is placed under the uniform and concentrated management in the entire Vietnam Social Insurance system; is accounted independently from the State budget and protected by the State.
Article 4.- The social insurance fund is used to make payments to the objects that buy social insurance and enjoy social insurance regimes from January 1st, 1995 and to cover the expenses of the managerial apparatus of the Vietnam Social Insurance system, the expenses of social insurance fund preservation and development and other expenses.
Article 5.- The investment fund for building the material base of the Vietnam Social Insurance system shall be gradually allocated from the State budget in a couple of years and also supplemented with profits derived from the implementation of investment measures to develop the fund.
Article 6.- Annually, the Vietnam Social Insurance shall have to draw up draft revenues and expenditures of the social insurance fund, expenses of the managerial apparatus and expenses of constructing the material base then submit them to the Managing Board of the Vietnam Social Insurance for approval and to the Ministry of Finance. The General Director of the Vietnam Social Insurance shall base himself/herself on the approved draft revenues and expenditures to assign the tasks of social insurance revenues and expenditures and construction investment expenditures to the Social Insurance of the provinces and cities directly under the Central Government.
The final settlement of revenues and expenditures of the social insurance fund and the expenditures on construction investment and procurement of working equipment and facilities shall be subject to the social insurance accounting regulations issued by the Ministry of Finance and other financial management regimes prescribed by the State.
Chapter II
SOURCES FOR FORMING THE SOCIAL INSURANCE FUND
Article 7.- The social insurance fund is formed from the following sources:
1. Contributions by laborers and employers.
2. State contributions and subsidies to guarantee the implementation of social insurance regimes towards laborers.
3. Profits derived from the investment activities carried out to preserve and develop the social insurance fund.
4. Financial support and aid from organizations and individuals inside and outside the country.
5. Other revenues.
Article 8.- The contributions by the objects that buy social insurance under the provisions in Point 1 and Point 2, Article 36 of the Regulation on Social Insurance issued together with Decree No. 12-CP of January 26, 1995 of the Government, the provisions in Point 1 and Point 2 of Article 34 of the Regulation on the Vietnam Social Insurance towards officers and professional military personnel, non-commissioned officers and men of the People's Army and the People's Police, issued together with Decree No. 45-CP of July 15, 1995 of the Government shall be effected as follows:
1. The Social Insurance at all levels shall have to guide and organize the full collection of social insurance premiums from all social insurance buyers on schedule as prescribed.
2. Monthly the employing units (including units, agencies and organizations under the Ministry of Defense, the Ministry of the Interior and the Government Commission on Cipher) shall have to make timely and full contributions to the social insurance fund right after paying monthly wages to their laborers.
Article 9.- The Vietnam Social insurance system shall be entitled to open deposit accounts for the social insurance fund at the system of the State Treasury and open accounts exclusively for the collection of social insurance premiums at the system of State-owned commercial banks. The balances on all deposit accounts of the Vietnam Social Insurance system at the State-owned commercial banks and the State Treasury shall be entitled to the demand deposit interest rate under the regulations of the State-owned commercial banks.
Chapter III
SOCIAL INSURANCE PAYMENTS
Article 10.-
1. The Social Insurance of all levels shall have to organize and make timely and full social insurance payments according to the State regulations and policies to the eligible beneficiaries of the social insurance.
2. The Social Insurance at all levels shall directly or authorize employing units and representatives of wards, communes and district townships to pay social insurance in accordance with the financial management principles; the payment documents must be valid and proper in accordance with current regulations of the State on the regime of accounting documents.
3. The Social Insurance of all levels shall be entitled to refuse to pay social insurance to social insurance beneficiaries when there is a competent State agency's conclusion on deceitful acts of forging dossiers and materials to enjoy the social insurance regimes; immediately take measures to recover the wrong payments (if any) and at the same time notify the subject person and the employing unit where he/she is working or the authorities of the place where he/she is residing and enjoying the social insurance regime for examining his/her responsibility in accordance with the provisions of law.
Article 11.- All payments to the beneficiaries of the social insurance regimes before January 1st, 1995 shall be fully funded by the State budget, including:
1. Pensions.
2. Allowances for the loss of working capacity.
3. Allowances for labor accident victims and their helpers and supply of aid devices for labor accident victims.
4. Allowances for occupational diseases.
5. Allowances for workers working in the rubber industry.
6. Death allowances (basic allowances and subsidies for the deceased's dependents) and burial costs.
7. Purchase of medical insurance.
8. Payment fees.
9. Other expenses (if any).
Article 12.- The Vietnam Social Insurance shall comply with all regulations on the drawing up of draft budgets, use and settlement of funds to make payments to social insurance beneficiaries, which are ensured by the State budget in accordance with the provisions of the Law on the State Budget and the guidance of the Government and the Ministry of Finance on the allocation, drawing up, observance and settlement of the State budget.
Article 13.- The social insurance fund used for making payments to beneficiaries of social insurance regimes from January 1st, 1995 shall cover the following:
1. Payment of pensions (regular and lump sum).
2. Allowances for labor accident victims and their helpers and supply of aid devices for labor-accident victims.
3. Sickness allowances.
4. Maternity allowances.
5. Allowances for occupational diseases.
6. Death allowances (basic allowances and subsidies for the deceased's dependents) and burial costs.
7. Purchase of medical insurance.
8. Payment fees.
9. Other expenses.
Chapter IV
MANAGERIAL EXPENSES FOR THE VIETNAM SOCIAL INSURANCE SYSTEM
Article 14.-
1. Regular managerial expenses for the Vietnam Social Insurance system extracted from the social insurance fund shall be calculated in percentage (%) of the actually collected social insurance amount each year (contributed by laborers and employers). In the immediate future, the managerial expenses shall be 6% for five years.
2. Managerial expenses for the Vietnam Social Insurance system shall comply with current norms and criteria of the State; besides, special-purpose expenses of the system shall be decided by the Managing Board of the Vietnam Social Insurance.
3. The Vietnam Social Insurance shall be responsible for allocating managerial funds to the Social insurance of all levels according to the assigned spending norms, criteria, regimes and tasks, ensuring the principle that the fund allocated to the Social Insurance of all levels shall not exceed the total revenues.
Article 15.-
1. Annually, on the basis of the approved percentage of managerial expenses, the Vietnam Social Insurance shall make a managerial expense estimate of the Vietnam Social Insurance system then submit it to the Managing Board of the Vietnam Social Insurance for approval and to the Ministry of Finance for supervision and monitoring of the implementation.
2. The Vietnam Social Insurance shall organize the payment, settlement and make financial reports in accordance with the social insurance accounting regulations issued by decision of the Minister of Finance.
Article 16.-
1. Investment fund for the construction of working offices of the Vietnam Social Insurance system shall be gradually supplied from the State budget in a couple of years and partly from revenues derived from the activities of preserving the value of and developing the social insurance fund.
2. When undertaking construction investment with the fund allocated from the State budget and the capital deducted from the profits derived from the fund development investment, the Vietnam Social Insurance shall have to strictly comply with the Government's current stipulations on the management of investment and construction and the ministries' and branches' documents guiding the management of capital construction investment.
Chapter V
ACTIVITIES OF PRESERVING THE VALUE OF AND DEVELOPING THE SOCIAL INSURANCE FUND
Article 17.-
1. The Vietnam Social Insurance shall be permitted to use temporarily idle money of the social insurance fund for the application of measures to preserve the value of and develop the fund. The use of the social insurance fund for investment must ensure safety and minimize risks to preserve its value and bring about socio-economic efficiency.
2. The Vietnam Social Insurance shall be permitted to take such investment measures to preserve and develop the social insurance fund as:
- Purchasing bonds and bills of the State Treasury and State-owned commercial banks.
- Lending capital to the State budget, the National Fund for Investment Support and the State-owned commercial banks.
- Investing capital in a number of the large projects and enterprises of the State, that need capital, and are permitted and guaranteed by the Prime Minister.
Article 18.- Profits derived from the investment activities of the social insurance fund shall be allocated as follows:
- 50% of the profits shall be deducted for five years to supplement capital to the construction of the material base of the whole social insurance system.
- Making deductions to the reward and welfare funds equivalent to the amount of three monthly actual wage payments in the whole system.
- The remainder shall be added to the social insurance fund for the purpose of preservation and development.