Brian Jeffrey
An increasing number of young Vietnamese workers are choosing to withdraw their social insurance benefits in a single installment, favoring immediate monetary needs over future financial security.
Data from Vietnam Social Insurance indicates that from January 1, 2016, to August 31, 2024, more than 1.285 million workers opted for a one-time withdrawal from the social insurance system. Out of these, approximately 631,128 have rejoined and resumed their contributions.
However, this decision causes these workers to forfeit their accumulated years of contributions, requiring them to start anew.
Dao Duy Hien, Deputy Director of Vietnam Social Security, revealed that one-time withdrawals are primarily seen among private sector employees who experience job uncertainty and frequent changes. Nearly 78% of these workers are aged between 20 and 40.
Young individuals often seek immediate financial relief instead of securing long-term benefits like pensions. With relatively modest salaries, many withdraw their insurance to tackle urgent expenses.
An expert on labor and wages has warned that this trend could lead to insufficient retirement savings, causing significant financial difficulties in old age.
Experts highlight that this one-time withdrawal option, reminiscent of past policies, has created substantial challenges for workers once they retire. Lacking pensions, many face struggles to sustain themselves in their later years.
Due to this concern, it’s crucial for the government to strengthen policies that encourage workers to remain in the social insurance system. Support should also be provided to help young employees navigate financial hurdles, ensuring they contribute long enough to qualify for pension benefits.
“As we grow older, even a small pension can be beneficial,” pointed out an expert. “Furthermore, health insurance benefits alleviate family pressures during health crises faced by workers.”
Under the newly established Social Insurance Law, effective July 1, 2025, individuals with fewer than 20 years of contributions may still withdraw their insurance benefits after not participating for 12 months in either mandatory or voluntary contributions. However, after this timeframe, the option for one-time withdrawals will be eliminated.
The updated law permits one-time withdrawals only under specific conditions: when someone reaches retirement age without enough contribution years; when moving abroad; or while battling severe health issues such as cancer, paralysis, cirrhosis, tuberculosis, AIDS, or when their working capacity is reduced by over 81%. It also applies to individuals with severe disabilities.
Calculations for one-time withdrawal payouts will be based on the number of years contributed at the following rates:
– 1.5 times the average monthly income for contributions made before 2014.
– 2 times the average monthly income for contributions made after 2014. If there are contributions both before and after 2014, any partial months from before 2014 will be adjusted according to the post-2014 rate.
If a worker has less than one year of contributions, their payout will equal the total contributions made, capped at twice the average monthly income used for social insurance calculations.
For those who received government assistance for voluntary contributions, the state-funded portion will not count in the total withdrawal amount.
Even if an individual opts for a one-time withdrawal, any remaining unemployment insurance contributions will remain intact. Should they return to employment and again contribute to unemployment insurance, those previous contributions will be incorporated into their new coverage period.
Experts emphasize that the government must prioritize support for workers, especially younger ones, to deter one-time withdrawals that threaten their future financial well-being.
The revised social insurance law embodies this initiative by restricting the conditions for one-time withdrawals, promoting sustained participation in the system long enough to access retirement benefits.
“While having a low pension isn’t ideal, it’s certainly better than having no pension at all. Health insurance can particularly lighten family burdens when older individuals face medical challenges,” remarked one labor expert.
