Currently dealing with a complex phase of the COVID-19 pandemic, businesses and individuals in Vietnam have been significantly affected. To support them, the Government issued Resolution 68 on 1st July 2021. Then on 7th July, they issued Decision 23 providing more details and guidance to implement the Resolution. The announced support package amounts to US$1.13 billion (VND 26 trillion).
- Industries are severely impacted – particularly in the South – and this could have an impact on Vietnam economic growth in 2021. Around 50,000 businesses have closed or have been suspended so far.
- Unemployment has risen while average incomes have been reduced.
- The industries that have been the most impacted include transport, tourism and F&B.
- GDP from January to June 2021 is at 5,64% (higher than 2020, lower than 2018 and 2019)
- Foreign direct investment remains strong and could return to previous levels if vaccination programs proceed as planned.
In 2020, the government announced a package of approximately USD 2.66 billion (VND 62 trillion) through Resolution 42. However, due to lack of experience on massive and quick support and complicated procedures, disbursement was slow, and the expenditure ratio was low (less than half of the total announced). Consequently in 2021, the government has decided to provide more support for companies and workers and to speed up the disbursement process.
A support package for employers
1. Reducing the contribution rate for labour accidents and occupational diseases insurance from 0.5% to 0% for 12 months (from July 1st, 2021 to June 30th, 2022). Employers are to use the reduction in these contributions to support their employees against the COVID-19 pandemic.
2. Suspending payment to the retirement and survivorship fund for 6 months (starting from submission of application). This is one of the three funds that together comprise the compulsory Social Insurance contributions, and which ordinarily requires a contribution of 14% from the employer and 8% from the employee.
This regulation applies to employers who have paid full Social Insurance contributions or have temporarily suspended contributions to the Retirement and Death Fund, after April 2021.
And to employers that have had to reduce the number of employees paying social insurance by at least 15 percent compared to April 2021.
3. Financial support for training and improving vocational skills for employees
The maximum value is set at VND 1,500,000 per employee per month with a maximum duration of six months. A request document must be submitted to the relevant authorities (DoLISA) between July 1, 2022, and June 30, 2022. However, they must meet the following conditions:
– Contribute in full to unemployment insurance for 12 months
– Their revenue of the previous quarter must have decreased by 10% or more compared to the same period in 2019 or in 2020
– Have a detailed training plan or cooperate with a vocational education institution on training and improving vocation skills and qualifications to maintain jobs.
In case the training lasts less than 1 month, the entitlement will be calculated for half a month for under 15 days training, and 1 month for under 1 month training.
A support package for employees
Allowances for employees temporarily ceasing work without salary
- Employees who take unpaid leave or their work contracts are suspended due to the pandemic are entitled to a one-time support of VND 1,855,000 per person. The period of suspension must be at least 15 continuous days and less than one month between May 1, 2021, and December 31, 2021. Employees must be contributing to the social insurance of the month before starting the work suspension.
- Employees that are out of work (take unpaid leave or their work contract is suspended) for more than a month will be entitled to VND 3,710,000. This applies to employees working for enterprises, cooperatives, public business units, and educational institutions.
- Employees that cannot work due to being in medical isolation or in blocked areas for more than 14 days are also entitled to a one-time payment of VND 1,000,000 provided they have been contributing to social insurance.
- Employees whose labor contracts were terminated and are not eligible for unemployment allowance between May 1, 2021, to December 31, 2021, due to the pandemic will be entitled to a one-time payment of VND 3,710,000 provided they were contributing to social insurance.
- In addition, employees that are pregnant are eligible to receive VND 1,000,000; those taking care and raising children under 6 (yo) are eligible for an additional VND 1,000,000 per child.
- Meal allowance
People who undergo treatment for COVID-19 (classified F0) from April 27, 2021, to December 31, 2021, are eligible for a meal allowance of VND 80,000 per day for a maximum of 45 days.
People who are in isolation (F1) from April 27, 2021, to December 31, 2021, are eligible for a meal allowance of VND 80,000 per day for a maximum of 21 days.
- Support for other jobs
Individuals working as art directors, actors, painters, and tour guides that have had to suspend operations for more than 15 days between May 1, 2021, to December 31, 2021, are eligible for a one-time payment of VND 3,710,000.
- Employees without labor contract or self-employed
This will depend on each provincial authority or city; however, the support will not be lower than VND 1,500,000 per person for one time or VND 50,000 per person/per day based on the actual number of suspended days.
- Business households
Business households with a registration certificate and tax registration that have had to cease operations for 15 continuous days between May 1, 2021, to December 31, 2021, are entitled to one-time support of VND 3,000,000.
- Business support
In addition, the Ministry of Finance in June issued Circular 47 reducing fees charges for several business lines affected by the pandemic from July 1, 2021, to December 31, 2021. Industries that can benefit include banks, construction activities, tour businesses, water resources, securities, commercial publications, healthcare, automobiles among others.
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