Can a Partially Self-Financed Public Service Unit Use Retained Fee Revenue to Pay Benefits Under Decree 178/2024/ND-CP?
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Based on:07/2025/TT-BTC - Ministry of Finance
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The Ministry of Finance (MOF) has issued an official response to a public service unit (a Tourism Promotion Center that is partially self-financed for recurring expenditures) regarding which funding sources may be used to pay retirement and severance benefits to employees under Decree 178/2024/ND-CP. The question centered on whether the unit could use its retained fee revenue to pay benefits for staff who fall outside the state-budget-funded staffing quota. Under Point b, Clause 2, Article 3 of Circular No. 07/2025/TT-BTC, for such staff the unit may draw on its allocated state budget estimate, revenue from public service activities, and other lawful revenue sources to make these payments. Read together with Article 15 of Decree No. 60/2021/ND-CP, which defines the financial sources of a Group-3 public service unit (partially self-financed for recurring expenditures) as including the state budget, public service activity revenue, retained fee revenue, and other revenue. The Ministry of Finance confirmed that the unit is entitled to use its annual state budget allocation, public service activity revenue, retained fee revenue, and other lawful revenue sources together to pay benefits to eligible individuals under Decree 178/2024/ND-CP. This clarification is important guidance for Group-2 and Group-3 public service units currently undergoing personnel streamlining and organizational restructuring.
The Question
An official working at a Tourism Promotion Center, a public service unit that is partially self-financed for recurring expenditures, raised the following issue: in August 2025, two employees were approved by the Provincial People's Committee for retirement or resignation benefits under Decree 178/2024/ND-CP.
The funding source for paying these two individuals (who fall outside the state-budget-funded staffing quota and include a labor-contract employee) was assessed by the local Department of Finance under Point b, Clause 2, Article 3 of Circular No. 07/2025/TT-BTC, which states that agencies and units must arrange payment from their allocated state budget estimate, public service activity revenue, and other lawful revenue sources.
The Center's current revenue sources consist of: public service activity revenue (from leasing public assets and public service business activities) and retained fee revenue that the unit is permitted to keep and spend under fee and charge law.
The question: can the unit use its retained fee revenue to pay benefits to individuals eligible under Decree 178/2024/ND-CP?
Ministry of Finance's Official Response
Under Point b, Clause 2, Article 3 of Circular No. 07/2025/TT-BTC: for personnel outside the state-budget-funded staffing quota, including labor-contract employees, agencies and units must arrange payment from their allocated state budget estimate, public service activity revenue, and other lawful revenue sources.
Under Article 15 of Decree No. 60/2021/ND-CP, the financial sources of a Group-3 public service unit (partially self-financed for recurring expenditures) include: the state budget, public service activity revenue, retained fee revenue, and other revenue.
Based on these two provisions, the Ministry of Finance concluded that the unit is entitled to use its annual state budget allocation, public service activity revenue, retained fee revenue, and other revenue sources to pay benefits to individuals eligible under Decree 178/2024/ND-CP.
Practical Implications
- Group-3 public service units (partially self-financed for recurring expenditures) may flexibly combine multiple lawful financial sources to fund downsizing, resignation, and early-retirement benefits, not limited solely to state budget allocations.
- Retained fee revenue (governed by fee and charge law) is confirmed as a legitimate funding source, provided the payment covers staff outside the budget-funded quota or under labor contracts.
- Public service units should cross-check the local Department of Finance's assessment and their internal spending regulations before making payments to ensure full compliance.