Employees’ Social Security Act Amended: What’s New
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The Employees' Social Security (Amendment) Bill 2022, passed by the Dewan Rakyat on Thursday, intends to expand social security coverage by raising certain worker benefits.
According to Human Resources Minister Datuk Seri M Saravanan, this includes raising the maximum monthly wage ceiling limit for contributions from RM4,000 to RM5,000, which will enhance protection under the Social Security Organisation (Socso).
He stated that the increase would include:
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Temporary disability benefits,
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Permanent disability benefits,
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Disability pensions, and
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Retirement pensions.
"To further explain this, for instance, a worker who is 30 years old and earns more than RM5,000 is eligible to receive permanent disability benefits and the calculation of the lump sum payment, according to the existing salary ceiling amounts to RM177,252.30.
"However, based on the calculation of the new salary ceiling, the worker will receive a total of RM222,126.30. Regarding this, there is an increase of 25.3% for the new wage ceiling compared to the current wage ceiling," he said when tabling the Bill for the second reading.
Wider protection for those who earn more than RM5,000
Meanwhile, as the debate on the Bill came to a close, Saravanan stated that the amendment was appropriate since it would provide greater protection to individuals earning more than RM4,000 to RM5,000, given that the cost of living had risen.
According to the most recent amendment, Point 45 will be replaced with "when wages exceed RM4,000 but not exceed RM4,100." It will then be followed by "when wages exceed RM4,100 but not RM4,200" until "when wages exceed RM5,000." These categories are also subject to employer-employee contribution rates, with the maximum employer contribution rate at RM61.90.
According to him, there are 19.7 million Malaysian workers and 1.94 million foreign workers registered in the SOCSO database, with a total of 678,329 beneficiaries as of December 2021.
He stated that as of 2021, benefit payments totalled RM4.334 billion.
“As of May 2022, the beneficiaries include 664,265 workers with payments amounting to RM1.958 billion.
"For workers involved in accidents, they are eligible to receive benefits under SOCSO during the first month of work even if they have not contributed yet. When they receive an offer letter, even if they have not contributed, they are still eligible," he said.
The Parliament sitting will continue on Monday.
Source: The Edge Markets