Expansion of Social Insurance for Employment Program: Efforts to Ensure Social Protection for Everyone Through Social Security
The membership rate of the social insurance for employment program in Indonesia is still low. Effortsto expand membership are needed, however, there are a number of challenges, including:
(1) regulations related to social insurance for employment still tend to focus on wage earners (Peserta Penerima Upah: PPU) or formal workers, with limited program coverage for non-wage earners (Peserta Bukan Penerima Upah: PBPU) or informal workers and other categories of workers;
(2) regulation governing fully subsidised beneficiares (Penerima Bantuan Iuran: PBI) of social insurance for employment for at-risk workers is still absence;
(3) awareness raising and outreach efforts to non-wage earners are still limited; and
(4) compliance level by employers and wage earners in adhering to social insurance for employment regulations has not been optimal.
To encourage expansion of social insurance for employment programs, the Government of Indonesia (GoI) could:
(1) revise regulations, especially those that could potentially inhibit membership expansion and program coverage–including by revising the non-wage earner membership age limits and changing the concept of retirement age in the old-age savings scheme;
(2) expand pension program membership to all worker categories;
(3) include at-risk workers in the PBI component of the social insurance for employment scheme as mandated in the 2020-2024 National Medium-Term Development Plan (Rencana Pembangunan Jangka Menengah Nasional: RPJMN);
(4) encourage the Social Security Agency for Employment (Badan Penyelenggara Jaminan Sosial: BPJS Ketenagakerjaan) to optimize awareness-raising and membership outreach efforts; and
(5) strengthen supervision and enforcement of employers/business entities to improve regulatory compliance.