Raising unemployment benefits continues to be an issue of concern among ministries and local authorities.

The Ministry of Labor, Invalids and Social Affairs (MOLISA) has recently received petitions from voters in the provinces of Lang Son, Thua Thien - Hue, Phu Yen, Ninh Thuan, and An Giang requesting an increase in unemployment benefits for workers who lose their jobs.

The voters suggested raising the unemployment benefit from 60 percent to 75 percent (equivalent to the maximum pension rate) to ensure a minimum standard of living for workers becoming redundant.

As of the end of 2023, the unemployment insurance fund had a balance of VND60 trillion, while unemployed workers were facing significant financial difficulties.

Prior to that, the Vietnam General Confederation of Labor, when suggesting opinions to the draft Law on Employment, had previously proposed increasing monthly unemployment benefits to 75 percent of average monthly salary based on which unemployment insurance was paid before workers became unemployed.

Therefore, the unemployment benefit should be raised to at least 75 percent, a reasonable level to help redundant workers maintain minimum living standards.

According to the confederation, most businesses pay unemployment insurance premiums based on the minimum regional wage determined by the government, which remains low. Thus, raising unemployment benefits to at least 75 percent is considered appropriate to support workers facing job loss.

At a recent National Assembly discussion about the revised Employment Law, Dieu Huynh Sang, a National Assembly deputy from Binh Phuoc, said that current unemployment benefits, which is 60 percent of the monthly average income, is not high enough to ensure a normal life for workers, let alone for their family members.

Meanwhile, businesses pay unemployment insurance based on the regional minimum wage, which is roughly over VND4 million a month, and so unemployment benefits amount to only about VND2.5 million.

Therefore, Sang believes that the law compilation board needs to consider raising the unemployment benefit from 60 percent to 75 percent to align with current living conditions, and removing the regulation on the maximum 12-month unemployment benefit period.

"Unemployment insurance policy should be based on the principle that if workers pay premiums, they can enjoy benefits, to make it match the 2019 Labor Code on severance pay," Sang said.

Nguyen Hoang Bao Tran, a National Assembly deputy from Binh Duong, agreed with the contributory principle that if workers pay insurance premiums, they enjoy benefits, which aims to ensure workers’ rights when they become unemployed. 

MOLISA statement

Addressing the petitions, MOLISA stated that the revised Employment Law draft law succeeds the provisions of the 2013 Law on Employment when stipulating that the unemployment benefit is equal to 60 percent of average monthly wages of the last six months before workers become redundant, and that the maximum unemployment benefit must not be more than five times the regional minimum wages stated by the government.

MOLISA contends that Vietnam's unemployment insurance policy, including its benefits, is modeled on the experiences of countries with similar conditions like Vietnam’s, including South Korea, Thailand, and Indonesia 

The unemployment benefit was designed after considering recommendations by the International Labor Organization (ILO) that the benefit should be no less than 45 percent of the previous income or the statutory minimum wage.

The current regulation on unemployment benefits is in line with the principle of defining unemployment benefits based on insurance premiums that workers pay.

The regulation helps ensure the safety of the unemployment insurance fund. The number of workers enjoying unemployment benefits is on the rise, and the number of workers who pay insurance premiums is also increasing, so the period of receiving benefits is expected to lengthen.

In 2020-2023, unemployment insurance revenue and expenditures were nearly equal.

According to MOLISA, unemployment benefits are short-term, which just partially support workers when meeting temporary job loss difficulties. Therefore, the revised Employment Law draft maintains the expected benefits of 60 percent of average monthly salary to ensure the fund's balance, while encouraging workers to proactively seek new jobs.

Vu Diep