DYNAMIC REFORMS IN SOCIAL SECURITY PROTECTION


Human Resources Minister Steven Sim aims to raise the age limit of the Housewives’ Social Security Scheme (SKSSR) from 55 to 60, thus allowing an additional 720,000 housewives nationwide to be protected under the scheme.

AT THE end of December last year, I visited the parents of a victim of a fatal workplace accident. The deceased was only 28 years old. He was the pillar of support for his elderly parents.

On behalf of the Social Security Organisation (PERKESO), I handed over a contribution to the deceased’s family: RM2,000 as a one-off Funeral Benefit and RM702 monthly as Dependant’s Benefit payment. Both parents of the victim will receive this monthly benefit until the end of their lives.

The weight of their loss is immeasurable. His mother wept softly as she received the RM702. This is the final contribution from their beloved child by way of repaying their dedication and sacrifices made for him.

In January this year, I visited a housewife who was a former clerk at a recruitment agency. She was left completely paralysed from a debilitating illness. She is unable to stand, sit or even speak. She can only lean against the sofa and watch the seconds tick by.

I cannot imagine facing such a tremendous test to my own body. Once again, on behalf of PERKESO, I delivered a monthly benefit of RM1,550 to her family.

No words and amount of money can replace one’s health and the happiness in life. Misfortune does not discriminate, and tragedy knows no bounds.

However, when something undesirable happens, the social security protection scheme serves as a support, providing relief in times of suffering.

Social security protection - a crucial aspect of KESUMA

In fulfilling the 3K strategic mission, which focuses on promoting the welfare, skills, and success of workers, the Human Resources Ministry (KESUMA) considers the aspect of social security protection for workers as a vital component.

The International Labour Organisation advocates for social security as a human right that provides protection against life risks. The social security system is not only an investment in the welfare of workers but also contributes to enhancing economic success and progress.

The strategy to enhance social security protection for workers under PERKESO is divided into three targets:

1. Short-term: Improving existing PERKESO policies

In February 2024, PERKESO officially launched the Prihatin smartphone application as the 55th PERKESO office.

This virtual office is expected to provide better services to contributors.

Through the Prihatin application and the PERKESO website, workers can now check their contribution status and download their statements.

The transition from conventional approaches to technology-based solutions allows contributors to register for PERKESO schemes anytime anywhere, as well as access services like Sahabat PERKESO Prihatin, general information from PERKESO, and benefit calculations.

Moreover, the Madani government’s promise in Budget 2024 to raise the contribution wage ceiling from RM5,000 per month to RM6,000 is being actively implemented.

The first reading of the proposed amendment to implement this measure was carried out during the Dewan Rakyat on March 26, 2024.

This improvement will benefit 1.45 million workers, increasing their protection benefits by 20.2%.

For example, a worker who has been earning RM6,000 per month and has lost their job can now receive an income replacement benefit of RM16,065 compared to RM13,365 before the amendment.

The Funeral Benefit has also increased from RM2,000 to RM3,000.

The age limit of the Housewives’ Social Security Scheme (SKSSR) will also be raised from 55 to 60, extending protection to an additional 720,000 housewives nationwide. The amended act will be implemented this year.

2. Mid-term: Intensifying protection reach to more workers

Prime Minister Datuk Seri Anwar Ibrahim announced an allocation of RM100mil in Budget 2024 as a subsidy for PERKESO’s Self-Employment Social Security Scheme (SKSPS) contributions for workers in the gig economy and the self-employed sector.

Through this subsidy, workers only need to pay RM23.30 annually for the second-tier contribution of SKSPS, compared to the original amount of RM232.80 per year. The remainder will be funded by the government.

With just RM23.30 per year or 6 sen per day, contributors can enjoy eight types of benefits such as medical, temporary disability, permanent disability, and more.

In mid-March, the Transport Ministry, in collaboration with KESUMA, provided 100% free SKSPS protection to 50,000 taxi and school bus drivers nationwide.

KESUMA’s target is to reach at least one million SKSPS contributors this year.

In addition to gig workers, the care economy sector is also part of KESUMA’s focus this year. This sector has long been overlooked in terms of its economic contribution.

Yes, mothers who care for their families at home are considered noble, but not many see their work as a form of economic activity that contributes to the country’s economy.

These individuals have to forgo career opportunities to care for family members. Besides losing a source of income by sacrificing their own careers, caregiving at home is also unpaid - imagine if these tasks were done by a domestic helper.

In line with the Madani concept, KESUMA aims to provide social security protection to these care economy workers, most of whom are homewives.

We begin at “home.” In conjunction with the celebration of International Women’s Day in March 2024, KESUMA provided free SKSSR protection to all 12,500 KESUMA members - male employees can nominate their wives.

KESUMA has also initiated a strategic collaboration with the Women, Family and Community Development Ministry to provide tax exemptions under Section 44(6) of the Income Tax Act 1967 to sponsors of SKSSR coverage for women from the B40 group.

3. Long-term: Implementing a comprehensive protection system

Separated into two components, the first is a plan to provide 24-hour social security protection to workers, even when disaster occurs outside working hours and scopes.

This 24-hour social security protection ensures better survival if a worker faces a disaster, complementing the existing welfare service and healthcare systems.

For instance, with this protection, a permanently disabled worker may receive monthly benefits of up to 90% of their monthly salary.

In the event of death, their dependents can receive these monthly benefits.

This undoubtedly eases the financial burden on the victim’s family while reducing the welfare and healthcare costs that taxpayers may need to cover if the victim is not protected by such a scheme.

Initial estimates indicate that the above benefits can be enjoyed with a minimal increase in contributions of RM11 monthly (for the lowest income bracket, i.e. RM1,500 per month).

However, the challenge to implement the 24-hour social security protection is evident: who will bear the additional contributions each month?

The second component of PERKESO’s long-term strategy is to provide rehabilitation services as a more comprehensive social security protection.

Over the past decade, PERKESO has been operating the PERKESO Rehabilitation Centre in Melaka. A total of 13,680 patients have undergone treatment at the high-tech centre. In 2023, out of 2,521 patients undergoing rehabilitation treatment, 676 successfully returned to work.

By the end of 2024, a PERKESO rehabilitation centre will be completed in Perak while another will begin construction in Terengganu.

KESUMA’s aspiration is to build three additional centres in the next five years, including one in Sarawak.

Furthermore, to provide more comprehensive services and reduce operating costs, PERKESO will establish at least one dialysis centre in each state within the next three years.

From 2020 to 2023, PERKESO spent between RM300 and RM350mil annually to finance dialysis services of affected recipients.

Currently, PERKESO has developed four dialysis centres: Klang and Shah Alam in Selangor, and Batu Pahat and Kluang in Johor.

PERKESO dialysis centres will provide a 15% cost savings for each dialysis treatment compared to the original method of dialysis treatment by appointing private dialysis centre panels.

Forging a strong path ahead

In conclusion, KESUMA is committed to strengthening the workers’ social security protection system through a strategic and systematic approach. There will undoubtedly be challenges to face - part of this renewal process may take time.

However, observing the current sentiments within the existing scope, there is an urgent need for a mindset change that social protection is not an additional financial burden on employers or employees but rather a long-term investment that guarantees success and the survival of the national workforce.

Taking on the responsibility as the Minister of KESUMA, I am grateful that the first 100 days in the ministry have been filled with various policy renewal plans for social security protection, a success catalysed by the support of civil servants and all KESUMA members.

KESUMA will forge ahead because this is only the first chapter of a long journey.

Steven Sim Chee Keong

Human Resources Minister

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