Expansion of Social Insurance for Employment Program: Efforts to Ensure Social Protection for Everyone Through Social Security

KEY Messages

  • The membership rate of the social insurance for employment program in Indonesia is still low. Efforts to 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.