KUALA LUMPUR: Every employee in the country now has to contribute to Socso (Social Security Organisation) and all will be covered in the event of accidents and disability.
Before amendments were made to the law, employers could choose to not register workers with starting salaries of more than RM3,000.
However, with the recent amendment to the Employees’ Social Security (Amendment) Act 2015, contribution has been made compulsory across the board.
Socso’s chief executive Datuk Dr Mohammed Azman Aziz Mohammed said the amendments were made to ensure that all workers are protected under the scheme.
“The Government hopes that these amendments will improve employees’ social security protection, while providing better and efficient service to safeguard the insured persons and their dependents,” Dr Mohammed Azman told The Star in an interview recently.
Beginning June 1, all employees will be registered with Socso regardless of their starting salary.
However the benefits accorded to them will be based on a ceiling rate of RM4,000.
A total of 6.5 million workers are expected to benefit from the amendments approved in March. Before June 1, the number of Sosco members was about six million.
The addition of 500,000 workers will increase Socso’s monthly collections and also offer higher benefits to those eligible.
“In 2015, we collected RM2.83bil and the benefits payment was RM2.68bil.
“That is only the benefit payouts; it is without maintenance, administration cost and other expenditure,” said Dr Mohammed Azman.
He added that if the amendments to the Act had not been made, Socso’s collection and benefit payouts would be about even.
“From our asset liability studies, it showed that by 2018, whatever we collect is what we would pay out, so there will be nothing extra.
“In 2019, we would have to dip into our reserve, which now stands at RM23bil. If we had continued with that trend, the reserve would be wiped out by 2029,” said Dr Mohammed Azman.
Prior to the amendment, based on the RM3,000 maximum contribution ceiling, the maximum payment for Temporary Disablement Benefit was RM78.67 per day.
“With the new maximum contribution ceiling of RM4,000, the amount of benefit will increase by 33.9% to RM105.33 per day.
“For Permanent Disablement Benefits, the quantum will be increased from RM88.50 per day to RM118.50, whereas for Dependant’s Benefits, it will increase from RM2,655 to RM3,555 per month,” said Dr Mohammed Azman.
These changes, he added, would also see an increase in the amount of payments for benefits under the Invalidity Scheme.
Dr Mohammed Azman said the maximum pension for Invalidity and Survivors’ Pension would increase from RM1,917.50 to RM2,567.50 per month.