(From left) PERKESO’s employment services division head Gayathri Vadivel, Ozmen, Hirose, Raj Nepal and McClanahan deep in discussion during the interactive session titled, “Financial Incentives for social security coverage and formalisation” at the World Social Forum 2025 yesterday. — YAP CHEE HONG/The Star
KUALA LUMPUR: Financial incentives are proving to be a tool for groups struggling to afford social security contributions, with a new survey showing these tools could highlight how the incentives could close coverage gaps including the informal working sector.
Shea McClanahan, a senior officer in social security and social policies from the International Social Security Association (ISSA) revealed that a study involving 26 countries found that contribution subsidies which reduce the cost of participation for both workers and small employers are already making an impact.
“These tools are working. More than two-thirds of the countries surveyed said their subsidy schemes were considered successful or very successful,” she said at the World Social Security Forum (WSSF) 2025 panel session held at Kuala Lumpur Convention Centre here, yesterday.
The interactive session was titled, “Financial incentives for social security coverage and formalisation.”
McClanahan said contribution subsidies are one tool to reduce the cost of social security participation for both workers and employers, particularly small employers, people in vulnerable employment and informally employed workers.
She elaborated that while some programmes were permanent, others were designed as transitional measures, helping countries boost formalisation, support employment creation and meet national social insurance targets.
Social security expert from Turkiye, Buket Ilgin Ozmen, who has long worked on unregistered employment issues in Turkiye, highlighted that “informal work” disproportionately affects women.
“As seen in other countries, you can see that non-registered employment is seen more in women. So it is like that in Turkiye as well.
“To address this, Turkiye has rolled out a series of projects specifically aimed at supporting women’s employment. Among them are a childcare programme to help mothers return to work, and a ‘Women-Up’ initiative encouraging small businesses to hire more women workers.
Ozmen elaborated that Turkiye now offers 15 different incentives, from minimum wage subsidies to premium discounts which covers not only women but a wide segment of the society as well as highlighting the government’s multi-layered approach.
“If you are a woman, you get an incentive. If you are disabled, you can get another incentive.
“But beyond subsidies, tackling informality requires structural reforms and a broader understanding of women’s realities,”she added.
While data collection by the Turkish Statistical Institute helps measure progress, Ozmen stressed that cultural and economic dimensions of informality also need to be considered.
Thailand’s International Labour Organisation (ILO) Regional Office for Asia and the Pacific DWT-Bangkok social protection senior technical specialist Kenichi Hirose shared that the care economy is a critical dimension of women’s labour participation.
Hirose said based on Japan’s experience, caregiving responsibilities have traditionally fallen on women.
He said the country introduced long-term care insurance in the early 2000s, shifting the burden from families to a society-supported system.
“The important thing is how to free these women out of this care obligation. If you rely on family support, that is not really the solution. The service should be provided by society,” Hirose said.
Unlike other countries that provide cash transfers to family caregivers, Japan opted to fund services directly, with zero cash benefits.
Nepal’s Social Security Fund administration director Uttam Raj Nepal said the country is pursuing two ambitious goals through its social protection system via universal health coverage and becoming a “pensionable society.”
Raj said the government has paired legal guarantees with timely and transparent delivery, such as same-day maternity reimbursements to encourage more contributions among the Nepalese citizens.
“More than 2.5 million people have already enrolled in the Social Security Fund, while around 10 million benefit from health coverage.
“Incentives include a one per cent tax waiver and a 50-50 subsidy scheme for informal workers. Nepal noted that public trust is rising, with timely delivery seen as the strongest driver of participation,” he added.
The five-day event, running until Oct 3, positioned Kuala Lumpur as the hub of international dialogue on social protection. Organised by ISSA, cohosted by the Social Security Organisation (PERKESO) and the Employees Provident Fund (EPF), with support from the Kumpulan Wang Persaraan (Diperbadankan) or KWAP, and the implementation coordination unit of the Prime Minister’s Department (ICU JPM), WSSF 2025 carries the theme, “Shaping Social Security for a World in Transition.”
