I strongly welcome the amendments passed in Parliament through the Ministry of Human Resource to raise the salary ceiling to protect more workers under the Social Security Organisation (SOCSO). Such amendments is estimated to cover up to 1.45 million additional workers under SOSCO.
Such social protection is important to ensure as many workers get necessary supports and financial compensation in case an accidents happen. While such amendments are welcome, the next step to ensure more comprehensive coverage for workers even outside working hours.
In my debate i raised the importance of us addressing the gap that still exists, namely workers who are not protected outside of working hours as well as the sustainability of SOSCO itself due to the costs of accidents which are getting higher and higher.
The protection provided by KESUMA through SOCSO currently only covers accidents that occur during working hours or activities that are classified as “work accidents”.
Just for some context, in 2023, a total of 63,199 cases of “pencen ILAT (DISABILITY claims) and PENAKAT (pension paid to the heirs of deceased contributors) have been reported to SOCSO. Of that, 31,345 or 50% were due to accidents on the road or at home.
In 2023, 82,876 accidents were reported to SOCSO. Only 68,220 were accepted as work disasters. This means that 18% or 14,656 of the applications are not accepted as work disasters, so the workers cannot get the necessary protection and assistance.
Imagine, in fact, all these non-disaster work cases can be helped if covered by a comprehensive non-disaster work accident protection scheme equivalent to the existing SOCSO scheme.
Indeed, in an ideal world, we want SOCSO or the government to fund and provide comprehensive protection for all those involved. However an important factor to consider is the sustainability of a “social insurance” policy to provide protection for workers preferably up to 24 hours, but the financial burden must be reasonable and sustainable.
According to Malaysian National Healthcare Accounts Health Expenditure Report 2011-2021, the expenditure for health has reached RM78.22 billion. And if, we examine deeper, the estimated expenses for accidents (trauma case expenses) that may be claimed by the workers alone could reach RM378 million.
As for welfare, the MADANI government allocates a JKM EPOKU aid scheme, where this scheme is a financial aid given to the disabled working group of RM450 per month. Overall, the cost of EPOKU which will be financed by tax revenue can reach RM217.5 million per year.
Both of these cost due to accidents to workers can reach up to RM595.6 million.
This does not yet take into account the increasing cost of invalidity due to health problems and NCDs that are getting higher. SOCSO’s expenditure on dialysis in 2023 is RM 356.31 million and we see an increasing trend every year.
So maybe there is a need to look at alternative financing and other models that don’t burden contributors too much but still provide comprehensive protection to them.
If we look at it, the global trend in financing the social protection system is now changing from relying on tax-based financing to social insurance schemes. These changes reflect the increasing emphasis on sustainable and self-sustaining financing mechanisms within the social protection framework.
For example, Germany and Japan have long-standing social insurance systems in which contributions from employers and employees fund health care, pensions, and unemployment benefits.
ecently, countries such as China and Indonesia have begun to adopt similar models to ensure a more stable and predictable source of funding for their social programs.
According to the International Labor Organization (ILO), this shift helps reduce fiscal pressure on governments and promotes a fairer distribution of social protection costs.
With this, I think Malaysia needs to go in that direction based on existing best practices and the concept of “shared responsibility” to not only provide comprehensive coverage for workers but form a sustainable system to deal with the costs arising from accidents.
Today’s working world has changed, the world of work no longer has boundaries where employees can be anywhere. And with this, social protection must also be enhanced and improved for users and contributors.