KUALA LUMPUR: Employers and employees may have to contribute between RM1 and RM2 more a month towards the Social Security Organisation (Socso) to widen the social safety net for workers, says the Human Resources Minister.
The move comes as the Covid-19 pandemic has exposed those in B40 group to higher social risks even as more Malaysians are becoming self-employed or working in informal sectors.
“The increase in contribution may be between RM1 or RM2.
“For example, in the informal sector, we are paying a high cost due to higher risks.
“The matter is being studied and a decision will be made in due time, ” Datuk Seri M. Saravanan told reporters after witnessing a memorandum of understanding between his ministry and Entrepreneur Development and Cooperatives Ministry here yesterday.
Saravanan said the last time an adjustment was made to Socso contributions was in 1971.
“We see that demand has increased from all sectors, and the rakyat is now more aware of the benefits of protection under Socso, and we want to widen the safety net.
“In this situation, we have to increase the contribution (in a way) that will not burden the rakyat, ” said Saravanan, who assured the public that the increased contributions will not be drastic.
The Covid-19 pandemic, said Saravanan, had shown the importance of Sosco in providing social safety net protection for both formal and informal workers.
“The aim is to transform Socso into a household name associated with a wider safety net for all sectors, ” he said, adding that the organisation had provided benefits to 2.72 million workers and about 300,000 employers since the pandemic began.
About 93,000 of 903,420 workers in 20 informal sectors are currently contributing to Socso.
Meanwhile, Entrepreneur Development and Cooperatives Minister Datuk Seri Dr Wan Junaidi Tuanku Jaafar, who was also present at the ceremony, said a study revealed about two million Malaysians are employed in the informal sectors or were micro-enterprise entrepreneurs.
“What is important is that contributions towards Socso is emphasised and promoted among these entrepreneurs and workers.
“It is not for the benefit of the government, but for their own benefit, ” he said.
It was learnt that the proposal to increase Socso contributions will be brought to the Cabinet for approval before the Human Resources Minister is empowered to enforce the new contribution rates.
At present, employers are required to pay monthly contributions for each eligible employee according to the rate specified under the Employees’ Social Security Act 1969.
Those who are self-employed pay a minimum of RM13.10 a month when the voluntary contribution scheme for the self-employed began in 2017.