Instructions to change from compulsory social insurance to voluntary insurance
Compulsory social insurance and voluntary social insurance are two types of social insurance which prescribed in the Law on Social Insurance 2014. So, when will employees be able to switch from paying compulsory social insurance to voluntary? Is the conversion procedure complicated? Let’s find out with Lawyer X through the following article:
Legal grounds
Law on Social Insurance 2014
Decision 595/QD-BHXH
Consulting content
In which case is it possible to change from compulsory social insurance payment to voluntary?
According to Clause 4, Article 2 of the 2014 Law on Social Insurance, to participate in voluntary social insurance, employees must meet the following conditions:
– Vietnamese citizens aged full 15 years or older.
– Not subject to compulsory social insurance.
Accordingly, employees can only switch from compulsory social insurance to voluntary social insurance when they are no longer subject to compulsory social insurance.
If they are still in the cases of participating in compulsory social insurance, even if there is a need, employees must not switch to paying voluntary social insurance.
Thus, after retiring from enterprises, state agencies, and non-business units, employees can participate in voluntary social insurance to accumulate more time to pay social insurance contributions to calculate pension enjoyment.
How to change from compulsory social insurance payment to voluntary?
According to Decision 595/QD-BHXH, to participate in voluntary social insurance, employees can follow the instructions below:
Step 1: Prepare documents.
Dossiers for participation in voluntary social insurance include Declaration of participation, adjustment of information on social insurance, and health insurance (Form TK1-TS).
Employees can download and fill out this form themselves, or go to the application site to apply for this form and fill it out.
Step 2: Apply and pay for social insurance.
Place of participation in voluntary social insurance: Collection agent or social insurance agency in the place of residence.
Employees can easily look up the address of the collection agency near their place here.
Employees can choose to pay insurance monthly, every 3 months, every 6 months, etc.
Note: The employee who previously participated in compulsory social insurance issued a social insurance book, so when switching to paying voluntary social insurance, the social insurance agency will continue to record the payment period in the issued social insurance book.
Does switching from compulsory social insurance to voluntary affect benefits?
The same is the social insurance organization organized by the State, but the regimes of compulsory social insurance; and voluntary social insurance have certain differences. Specifically, Clauses 1 and 2, Article 4 of the Law on Social Insurance 2014 clearly state:
Compulsory social insurance has the following regimes:
– Sickness;
– Maternity;
– Occupational accidents and diseases;
– Retirement;
– Death of the dead.
Voluntary social insurance has the following regimes:
– Retirement;
– Death of the dead.
It shows that the benefits of voluntary social insurance include only retirement and survivorship benefits. While; in addition to retirement and survivorship, participants of compulsory social insurance which also entitled to sickness benefits; maternity; occupational accident; occupational diseases when eligible.
Thus, when switching from compulsory social insurance to voluntary social insurance, employees will reduce their benefits.
However, participating in voluntary social insurance after retiring is an effective solution to help employees have economic support when they are old, which is a pension. Because the time of payment of voluntary social insurance will be added consecutively to the time of payment of social insurance to calculate the allowance for repatriation and the survivorship regime.
Please see more articles:
Conditions for establishing an insurance business in Vietnam
Do foreign workers have to participate in unemployment insurance?
Related question
When a participant of voluntary social insurance dies:
– The person taking care of the funeral is entitled to a funeral allowance according to the provisions of Article 80 of the Law on Social Insurance 2014.
– Relatives are entitled to a lump-sum survivorship allowance according to the provisions of Article 81 of the Law on Social Insurance 2014.
The rate of payment of voluntary social insurance is calculated based on the monthly income selected by the employee, specifically as follows:
Monthly payment is equal to 22% of the monthly income selected by the employee to contribute to the retirement and survivorship fund; The lowest monthly income used as a basis for social insurance payment is equal to the poverty line in rural areas and the highest is 20 times the basic salary.
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