Vietnam to raise pensions, public sector wages by $1.55 billion

By Anh Vu, Thanh Nien News

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Vietnam's government is expected to spend up to $1.55 billion next year on a wage hike for 1.8 million of the lowest-paid government employees. Photo: Anh Vu Vietnam's government is expected to spend up to $1.55 billion next year on a wage hike for 1.8 million of the lowest-paid government employees. Photo: Anh Vu

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Vietnam's National Assembly approved a financial package that will raise pension payments and welfare subsidies as well as the minimum wage for state employee, starting next year.
As many as five million people will benefit, according to government sources.
On Monday, the legislators approved an 8 percent increase in the government's minimum wage -- raising the monthly salary for the lowest-paid 35 percent of government workers from 1.15 million (US$54) to VND1.24 million.
The salary increase will directly effect 1.8 million employees.
They also approved a hike in retirement payments and special subsidies by the same rate. Vietnam pays those subsidies to 2.9 million people, many of whom are war veterans.
Officials estimated that the wage increases will cost the state VND33 trillion ($1.55 billion) next year.

The Finance Ministry submitted the wage increase proposal last week with three options and the other two were significantly cheaper.
One suggested spending VND11 trillion ($517 million) raising wages for the lowest-paid state employees and the other VND6.7 trillion ($319 million) raising pension and special subsidies by 10 percent.
The ministry suggested using part of the 2014 budgetary surplus to pay for both proposals. The state's income, this year, is expected to be VND63 trillion higher than planned.

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