Cases eligible for lump-sum social insurance:

Foreign workers who have contributed to social insurance and request to claim a lump-sum benefit are eligible if they fall under one of the following cases:

a) Reaching the retirement age as prescribed but having less than 20 years of social insurance contributions;

b) Suffering from one of the life-threatening diseases such as cancer, paralysis, cirrhosis with ascites, leprosy, severe tuberculosis, HIV/AIDS in its final stage, and other illnesses as regulated by the Ministry of Health;

c) Being eligible for retirement but no longer residing in Vietnam;

d) Upon termination of the labor contract or expiration of the work permit, practice certificate, or professional license without renewal.

Thus, foreign workers whose labor contract ends or whose work permit, practice certificate, or professional license expires without renewal are eligible to claim a lump-sum social insurance benefit.

Required Documents:

• Employment contract
• Decision on termination of employment
• Social insurance book (original) with completed insurance contribution records
• Passport translated into Vietnamese and notarized in accordance with Vietnamese law
• Request form (Form 14-HSB)
• Power of attorney (if applicable)

Within 10 days from the termination of the employment contract or the expiration of the work permit, practice certificate, or professional license (whichever comes first), if the foreign worker does not continue working or does not have their permit renewed, they can submit the required documents to the social insurance agency to request a lump-sum payment.

Calculation of Lump-Sum Social Insurance Benefit:

The lump-sum social insurance benefit is calculated based on the number of years of social insurance contributions. Each year is calculated as follows:

1. Two months of the average monthly salary used as the basis for social insurance contributions for the years of contribution after 2014;
2. For contributions of less than one year, the lump-sum benefit is equivalent to the total amount paid, up to a maximum of two months of the average monthly salary.

Formula for calculation:

Lump-sum benefit = 2 x Average monthly salary for social insurance contributions x Number of years of contributions

Example: A worker participated in social insurance from January 2023 to December 2023 with a monthly salary of VND 20,000,000. The average salary used for social insurance contributions is VND 20,000,000/month. The worker resigns in January 2024.

The lump-sum benefit for the foreign worker would be:

20,000,000 x 2 x 1 = VND 40,000,000

Lump-sum social insurance provides significant financial support for foreign workers when they leave Vietnam. This not only ensures their entitlements but also helps stabilize their financial situation during the transition period, especially when facing unexpected expenses or a gap before finding new employment in their home country. This scheme allows workers to recover their social insurance contributions, creating favorable conditions for resettlement or investment in future plans. For further assistance, please contact TPM’s team for support.

Do Thi Thu Quynh – Head of Payroll and HR Services – quynh.do@tpm.com.vn

References:

• Law on Social Insurance No. 58/2014/QH13, dated November 20, 2014
• Decree No. 143/2018/ND-CP, issued on October 15, 2018
• Decree No. 115/2015/ND-CP, issued on November 11, 2015