SOCSO Coverage Contributions Ceiling Raised to RM4,000
500,000 more Malaysians will be able to benefit from SOCSO coverage come 1 June 2016, as announced by Human Resource Minister Datuk Seri Richard Riot Jaem. If you’ve earned up to RM3,000 per month up till May 2016, then you may have noticed that a part of your monrthly salary is apportioned for SOCSO by both you and your boss (if not, look for its annual summary in your EA form).
Upon the gazetting of the amendments to the Employment Social Security Amendment Act, the number of workers who will benefit from SOCSO coverage is expected to increase to 6.5 million individuals. That’s one fifth of our entire country’s population! SOCSO is, for some reason, the lesser-known contributions companion to the Employees Provident Fund (EPF); even if you know that it exists, do you know what it is for?
What is SOCSO?
The Social Security Organisation, or SOCSO for short, covers employees medically and financially in the event of incapitation or death, and its benefits can be categorised into the Employment Injury Scheme and the Invalidity Pension Scheme.
The Employment Injury Scheme protects employees who are injured in the course of employment, providing benefits such as medical, disablement, rehabilitation, funeral, and educational benefits, in addition to a constant attendance allowance and a return-to-work programme.
The Invalidity Pension Scheme, on the other hand, covers the employee when they experience invalidity – the loss of their ability to earn a third of the typical earnings of a fully able insured person – or lose their life by any causes unrelated to their employment. This inability has to be either permanent or has a very low possibility of recovery in order for this scheme to take effect, but if it does, you stand to receive invalidity pensions and grants, survivor’s pensions, funeral and educational benefits, as well as access to physical rehabilitation and dialysis facilities.
Who is Eligible for SOCSO Membership?
As of 1 June 2016, any employee who earns up to RM4,000 a month will be automatically eligible for SOCSO coverage. Malaysia’s Human Resource Ministry is also working towards covering all employees including the self-employed, such as businesspersons and taxi drivers.
Is SOCSO Compulsory?
SOCSO is compulsory and automatic for those who earn up to RM3,000 a month (up to May 2016), or soon-to-be RM4,000 a month (from June 2016 onwards). Those who earn above this contributions ceiling can still contribute towards SOCSO as once you’re a member, you stay a member.
SOCSO as Inheritance
Did you know that SOCSO can become an inheritance of sorts for your dependants should you pass away? Under the Invalidity Pension Scheme, the pensions awarded to you can be transferred to your dependant family members after your death, such as a housewife partner, if they apply to have it done. It might not be a large sum, but any amount of money is likely to help relieve your dependants in the event of your demise.
Up for Grabs: Free Health Check-Ups
SOCSO tries to promote early detection by issuing health cheques to millions of Malaysians, something which is grossly under-used or declined by eligible recipients. Sure, it lacks the flexibility of time in the sense that you’ll have to take a day off, but on the flip side, you get a free health check-up that could be worth hundreds of ringgit, so why not cash in that cheque?
Are you affected by this new development? It’ll cut into your net monthly useable income, yes, but it’ll also become your supplemental (or primary) insurance of sorts.