WITH the Government mulling the idea of raising contribution rate to Social Security Organisation (Socso), several unionists voiced reservations on the matter.
“In my opinion, not for now. This is not the right time. In addition, any plans to review Socso contribution must be discussed with stakeholders first,” UNI-Malaysia Labour Centre (UNI-MLC) president Datuk Mohamed Shafie BP Mammal told FocusM.
Last week, Human Resources Minister Datuk Seri M Saravanan was reported saying that his ministry was studying the possibility to raise Socso contributions, the Employees’ Social Security Act 1969 (Act 4).
He also said that the contribution rate had never been raised since 1971, the year Socso was established, with demand for contributions had increased from all job sectors, including from the informal ones.
“The people are aware of its benefits because they provide safety protection. I believe the situation calls for a slight increase that will not burden the people … maybe we can increase it by RM1 or RM2 to further widen the safety protection,” the Tapah MP was reported saying.
Touching on the matter, Shafie said that a thorough study is needed on the plan, with proper consultation done with both employers and employees.
He added that the Government needs to be transparent on why the hike is needed; whether it is to widen the claims structure for the contributor’s benefit or because Socso was handling too many claims.
“All these needs to explained in detail. If the Government simply increase the contribution, we will only create anger among the public.
“Plus, we’re going through an economic downturn. For some of our workers, even RM1 is a lot of money now. Without adding value to the services, people will question such moves,” Shafie added.
Need comprehensive plan of improvement
The veteran labour activist said that Socso is reputable organisation, adding it offers the cheapest “insurance scheme” for Malaysian workforce to date.
“I agree Socso may have its shortcomings but we need to give it room to explain the matter to us. Despite hiccups, Socso managed to help a lot of workers and businesses during the economic turmoil, under the Employment Insurance Scheme (EIS) and Wage Subsidy Programme,” Shafie stated.
On related matter, Malaysian Trades Union Congress (MTUC) Penang chapter urged Saravanan to present a comprehensive improvement plan to the existing Socso schemes before hiking up rates.
“If not, we will not support any increase in the workers’ Socso contributions,” said its secretary K Veeriah.
He added that any increase in the employer-employee Socso contributions has to be on “need-based consideration”, not on the notion that such an increase is overdue.
“If that logic is to be applied, equitably, then even the employer-employee Employers Provident Fund (EPF) contributions needs to be revised, since the rates have remained stagnant for a considerable period of time,” Veeriah opined.
He added: “Any increase in the rates should also bring about enhanced social security benefits to the worker, such as an enhancement of benefits in invalidity pension, temporary disablement benefits, payments under the EIS and others.” – March 16, 2021.
