Increasing The Membership Of Employment Insurance For The Missing Middle And The Working Age Group

Indonesia continues to make considerable progress to increase the membership of its social insurance program especially for its wage recipients (pekerja penerima upah/PU) who are mostly formal sectors workers. Unfortunately, coverage for the non-wage recipients/pekerja bukan penerima upah/BPU who mostly work at the informal sector workers are still very low (about 2.4 million active members as compared to the 28 million active members who are the wage recipients).
 
In 2018, around 150 million people are aged 19 to 59 years old (working age/productive age group, see Table 1). With a total 30.4 million workers (28 million active members from wage recipients/PU and 2.4 million from the non-wage recipients/ BPU)2 enlisted as the members of Employment Insurance, it only represents around 22.2 percent of the working age group who have access to the employment insurance scheme.

Based on Law No. 40 of 2004 on the national social security system (Undang-Undang Sistem Jaminan Sosial Nasional – SJSN), 5 health and employment insurance schemes are currently being implemented: national health insurance (Jaminan Kesehatan Nasional – JKN), casualty or work injury compensation (Jaminan Kecelakaan Kerja – JKK), survivors’ benefit (Jaminan Kematian – JKM), old age savings with disability benefit (Jaminan Hari Tua – JHT) and elderly pension (Jaminan Pensiun – JP). Under Law No 24 of 2011 the government then established the Social Security Agency for Employment (BPJS Ketenagakerjaan) and the Social Security Agency for Health (BPJS Kesehatan) to manage these schemes.

Indonesia’s contributory schemes within the social protection system are currently reaching the more affluent members of society in the formal sector. For those living in poverty, the government provides social protection through several noncontributory programs and for the National Health Insurance (JKN) through Penerima Bantuan Iuran (PBI/fully subsidized premiums for the poorest 40 per cent of households). However, the ‘missing middle’ still have limited government support to ensure their basic economic security.