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takeholders of the social security scheme are at odds over the amount of insurance premium contributions they should pay for the five mandatory national social security programs, expected to take effect by January 2014.

Details from the draft regulations prepared by the government and the National Social Security Board (DJSN) have included a proposal for premiums of 23.7 percent to be paid jointly by workers and their employers for the five mandatory programs while state-owned insurance company PT Jamsostek, which is mandated to carry out the four labor social security programs, proposed a 25 percent joint contribution from workers and their employers.

Employers and workers have voiced their differences over the amount of premiums proposed by the
government.

Employers insisted they could only pay less than the amount stated while labor unions are yet to reach a decision on the amount they are willing to contribute.

The Confederation of All-Indonesian Workers Union (KSPSI), Confederation of Indonesian Prosperous Labor Union (KSBSI) and a splinter camp of the KSPSI have made the demand for premiums to be paid by employers.

Muchtar Luthfie, secretary-general of the Manpower and Transmigration Ministry tasked to draw up government and presidential regulations on the four labor social security schemes, said the differences in demands from multiple stakeholders had caused confusion.

“Several tripartite meetings held in the past few months have failed to agree to a compromise and whatever the government decides — it will be met with strong protests,” Muchtar said recently.

He said that all government and presidential regulations mandated by the Social Security System Law and insurers law must be ready this month, before endorsement in October.

Jamsostek’s director Elvyn G. Masassya said both employers and workers must pay more for the old-age risk and pension scheme premium.

Elvyn said that the proposal was made after consulting International Labor Organization conventions as well looking at other countries like the Philippines, South Korea, Malaysia and Germany.

He also said that Jamsostek would provide a fixed amount of benefits on the occupational accident and death schemes ‘as the current insurance provider’.

Workers would also receive the old-age risk and pension benefits plus yields from their deposit investment.

“We will also provide additional benefits such as mortgage credits, low-cost flats and scholarships,” he said.

He also said Jamsostek would set up three additional main branch offices in three provinces to improve its service for workers.

Currently, the company operates branch offices in 497 regencies and municipalities and desks in industrial areas. Elvyn said he is convinced that with the existing resources Jamsosek would be prepared to provide world-class social security services.

A member of DJSN, Djoko Heryono, said vulnerable groups, including the poor, would not be registered for the four occupational social security programs relating to financial difficulties.

Djoko said that under Government Regulation No. 101/2012 on cash aid recipients, vulnerable groups would be registered for the national healthcare program to be paid for by the government.

The government has proposed Rp 22,500 (US$2.2) as minimum premium for the vulnerable group’s healthcare program under which they would be eligible to receive Grade III medicare services at general hospitals appointed by the government.

As for workers in the informal sector, the government has proposed premiums ranging from Rp 27,000 for Grade III health service, Rp 40,000 for Class II service and Rp 50,000 for Class I service.