Adapting Social Protection for Modern Crises
The Covid-19 pandemic highlighted the critical need for a strong social safety net, as it caused widespread job losses and business disruptions in Malaysia. Datuk Seri Dr Mohammed Azman Aziz Mohammed, the Group CEO of the Social Security Organisation (Perkeso), noted that the crisis profoundly impacted the welfare of workers and society as a whole. Perkeso, he stated, was ready to serve as a primary provider of social protection, thanks to its proactive introduction of the Employment Insurance System (EIS) Act 2017. This system was a crucial step in supporting workers who lost their jobs due to unforeseen circumstances. A key component of this effort was the Wage Subsidy Scheme, which successfully protected over 3.1 million workers and helped nearly 400,000 employers retain staff during the pandemic’s economic downturn. This initiative demonstrated the power of social insurance to safeguard both jobs and businesses during times of crisis.
Expanding Coverage for the Evolving Workforce
Even as the Malaysian economy recovers, new challenges from structural changes in employment continue to emerge. With the informal sector growing to 3.45 million workers in 2023, including those in the gig and e-hailing economies, Perkeso recognized the need to expand its social protection to these vulnerable groups. The organization introduced the Self-Employment Social Security Scheme (SKSPS) to provide coverage for informal sector workers, ensuring they too are protected from risks. Additionally, the Housewives’ Social Security Scheme (SKSSR) was launched to acknowledge the contributions of women in the care economy and provide them with social protection. Perkeso has also focused on early intervention strategies to address job loss risks, working with employers to provide support and programs for at-risk employees before they are laid off. These proactive measures help workers prepare for new employment and secure new jobs more quickly.
Future-Proofing Social Security for Tomorrow’s Challenges
In response to a constantly changing economic landscape, Perkeso has taken further steps to enhance its social security framework. To ensure its protection remains relevant, Perkeso amended Act 800 to raise the salary ceiling for contributions and benefits from RM5,000 to RM6,000 per month. This move is specifically aimed at providing better protection for workers in the fast-growing gig and informal sectors. Perkeso is also actively involved in empowering the gig economy through initiatives like the Gig Economy and Entrepreneurship Career Programme and the Bina Kerjaya (Career Building) programme, which provide essential business skills training and career support. Looking ahead, Perkeso is preparing for major demographic shifts, such as the “Golden Tsunami” of an aging population. This will require a greater focus on sustainable retirement funds and elderly healthcare, ensuring that the country’s social security ecosystem continues to evolve and serve all groups of workers.
