VietNamNet Bridge – Civil servants, members of the armed forces and socio-political organisation stafff will enjoy an increase of 9.5 per cent to their monthly minimum wage from July 1.

According to a new government decree issued yesterday, July 1, the wage would rise by VND100,000 (US$4.76) from the previous VND1,050,000 ($50).

The decree stated the adjustment was based on the State budget's capacity, consumer price index and the country's economic growth.

This is the fifth minimum wage increase in the past five years. In 2009, it was VND650,000 ($30.9) and in 2010, it had climbed to VND730,000 ($34.7). In May 2011, it increased to VND830,000 ($39.5), while a year later it rose 26.5 per cent to VND1,050,000. The increase would put more pressure on the social insurance fund, which already suffered a severe imbalance between collection and spending, deputy minister for Labour, Invalid and Social Affairs Pham Minh Huan told Dau Tu (Investment) newspaper.

Statistics showed the fund's collection rate rose 18 per cent between 2011 and 2012, while spending increased by 28 per cent.

Huan said that currently, only 20 per cent of the labour force paid social insurance, while the ratio of people paying social insurance per pensioner had declined from 217:1 in 1996 to the current 10:1.

Source: VNS