Government agrees with RM70m provision to Socso for employment insurance system

May 1, 2017

Prime Minister Najib Razak today announced that the government agreed with a provision of RM70 million to the Social Security Organisation (Socso) for the payment of financial benefits relating to the Employment Insurance System (SIP) for next year (2018).

When touching on the Workers Transformation Leap, aimed at expanding the social security protection in his speech at the 2017 National Labour Day in Putrajaya today, he also announced that the government proposed to expand the coverage of the Self Employed Social Security Scheme in stages to informal employment categories such as fishermen, farmers, smallholders, hawkers and arts practitioners.

For a start, he said the scheme, which was announced in the Budget 2017, would provide protection to about 100,000 people, comprising taxi drivers who are self employed and individuals performing services such as Uber and Grab Car effective June 1 this year (2017).

Najib said to ensure that about 6.5 million local private sector workers currently under the Employees Social Workers Security Act 1969 are always being taken care of and protected, the government had agreed to launch the SIP.

“Through this SIP, employees will get temporary financial assistance to support themselves and their family for a certain period of time while looking for a new job,” he said.

He said workers, who lost their jobs would also be given employment service support that included job search assistance, job matching, career counselling and career training for new jobs.

To implement the SIP, Najib said, the government was in the process of drafting the SIP Bill for tabling at the next parliamentary session, he said.

He said the contribution would be implemented in January 2018 and the provision of financial benefits expected to be made from January 2019.

He said SIP was a long term measure aimed not only at helping the affected employees but also to maintain and boost economic growth in a sustainable manner, especially in the event of a recession.

“SIP is like the Malay proverb, ‘get ready an umbrella before it rains’,” he said, in urging all employers to support the implementation of the SIP.

Najib said as a government that took care of its workers’ welfare, an allocation of RM52 million was channeled to Socso in the 10th Malaysia Plan.

He said during the 2017 Budget presentation, he had announced a launching grant of RM60 million to implement the Employment Injury Scheme for taxi drivers who are self employed or individuals carrying out similar schemes, in which these were administered through the Self Employment Social Security Scheme.

“Through the scheme, the insured person who is self employed, will be protected in the event of an accident while at work or suffers from an occupational disease just as those in the formal sector,” he added. –Bernama