Comparative Analysis of the social security legislation in view of a possible future ratification of the Social Security (Minimum Standards) Convention (No.102) 1952 Sinta Satriana

Convention 102 The Nine Branches – medical care – sickness benefit, – unemployment benefit, – old-age benefit, – employment injury benefit, – family benefit, – maternity benefit, – invalidity benefit and – survivors’ benefit.

Convention 102 The minimum standards are set for each contingency: – minimum percentage of the population protected in case of occurrence of one of the contingencies; – minimum level of benefits to be paid in case of occurrence of one of the contingencies, and – conditions for and periods of entitlement to the prescribed benefits.

Convention 102 Requirement: – minimum 3 out of the 9 branches, with at least one covering a long-term contingency (old age, disability, survivors’) or unemployment. – Social Security Providers based on the principle of mutuality – Supervision by the competent public authority to provide proper accountancy, actuarial valuations, the compilation of statistical information and the maintenance of records – Financing can be by insurance contribution, by taxation, or a combination of both. When financed by contributions, employees’ contributions, must not exceed half. – Equality of treatment between national and non-national

Health C102: Provision of medical care benefits through a social insurance scheme or a national health service (contributory or not). The contingencies covered include morbid condition, pregnancy and childbirth. Coverage: – At least 50% of all employees, and their families; or – Economically active population constituting at least 20% of all residents; or – At least 50% of all residents Duration of medical care: minimum 26 weeks

Health (Legal) Coverage in Indonesia (MoH Data): 59% of population (Jamkesmas, Jamkesda, Jamsostek, Askes, private insurance) Universal scheme for childbirth (Jampersal)  in line Duration of medical care e.g. In Jamsostek: 60 days Benefits differ across different schemes  Not in line

Health Implementation of Law No. 40 of 2004 facilitates will enable the Government to gradually guarantee uniform health care coverage to the entire population. The features of the regulations to be adopted by application of the Law will be of great importance. It would be advisable, when formulating these regulations, to take into consideration the standards laid down in the Convention.

Sickness Benefits C102: Coverage: – At least 50% of all employees; or – Economically active population constituting at least 20% of all residents; or – All residents with limited means Benefit: at least 45% of reference wage Duration of Benefit payment: at least 26 weeks

Sickness benefit insurance is not included in the current social security programmes (Jamsostek and Askes) and not stipulated in Law 40/2004. However, Law No. 13 of 2003 regarding Manpower Affairs requires full payment of employees’ wages in case of sickness for up to 12 months. The benefit is in line with C102, BUT – in terms of financing and administration, employers bearing the sole responsibility for the payment do not keep with the collective or participatory character required by the Convention. – Higer risk of discrimination in employment

Unemployment benefit C102: periodical cash benefit for a minimum duration of 13 weeks within each 12 months period No unemployment Insurance currently in place, but the labour law (13/2003) oblige severance pay for formal sector workers.  type of payment not in line with C102

Old-Age, invalidity, and survivors’ benefit C102: Part V: Old-age benefit up to the death of participant Part IX: invalidity benefits and provides for the payment of periodical cash benefits in case of disability, throughout the contingency or until an old-age benefit is payable Part X guarantees to the widow and children following the death of the breadwinner Long term periodical benefit i.e. pension Coverage: at least 50% of all employees; or active population representing at least 20% of all residents; or all residents with limited means

Old-Age, invalidity, and survivors’ benefit Periodical Pension in place: – Taspen & Asabri: <7% of population – JSPACA & JSLU: 32,750 persons Jamsostek JHT & JK do not provide periodical benefit and low protection in compensating for the loss of income Law 40/2004: Pension benefit appear to target formal sector only

Employment Injury Benefit C102 Medical care provided in case of Morbid condition until full recovery/stable condition Temporary incapacity for work: benefit of 50% of salary Permanent incapacity to work: benefit in periodical payment at least 50% of reference salary Death: periodical survivors’ benefit Covers at least 50% of all workers No qualifying period of contribution, no time limit to the benefits

Employment Injury Benefit Jamsostek Employment Injury programme: – Medical care with a limit of IDR 20 million  not compatible – Temporary incapacity for work: stages of 100% salary, 75% and 50%  compatible – Permanent disability: Lump sum benefit and 24- month periodical benefit  not compatible – Death: Lump sum benefit and 24-month periodical benefit  not compatible – Coverage well below the required 50% of workers

Family benefit C102 Cash or in kind (food, clothing, housing etc) or a combination of both, for families with children. Coverage: at least 50% of workers; or active population representing at least 20% of all residents; or all residents with limited means Existing schemes : Civil Servants’ child allowance, PKH and PKSA (<7%)  Not yet sufficient coverage.

Maternity benefit C102: In times of pregnancy and childbirth, benefits are provided in the form of medical care and cash benefit to compensate for the suspension of earning Existing schemes: Jampersal (universal childbirth care) Jamsostek Health, Askes and other health insurances  qualify for the medical care part Cash benefit (3moth-full salary) for formal economy workers, paid by the employer  poses risks of discrimination

Administration C102: Social Security Providers based on the principle of mutuality Current providers: Perseros (Limited Liability), for profit Companies, dividends paid to the shareholder (government), and their profits are taxable.  do not correspond to the standards laid down in Convention No. 102 The New Law on Social Security Provider (BPJS) no 24 of 2011: Among the principles of Social Security Provider are non-profit and trust fund. Proceeds from the program are to be used for the development of the program and as much as possible the interests of participants of the program  More in line with Convention No. 102

C102: Regular review of long-term periodical cash benefits, which must be adjusted following substantial changes in the level of earnings/cost of living Current Schemes: Civil servant’s pension (Taspen & Asabri) Periodically reviewed  in line with C102 Social transfer for vulnerable Eldely (JSLU) and Disabled (JSPACA) Not adjusted  Not in line with C102

C102: Equality of treatment between national and non-national Both the current Social Security law and the new SJSN law do not make distinction of treatment (foreigners who contribute are entitled to benefits)

Main Gaps Contingencies not covered: sickness, maternity, unemployment and family benefits In most schemes the percentage of persons covered by most of the existing schemes is not sufficient Range of benefits not complete (medical care, periodical pensions) and the amount of benefits is not in line with Convention No. 102 Benefits not standardised across schemes

The adoption of Law No. 40 gives the opportunity to establish comprehensive social security system based on sound principles The minimum standards laid down in Convention No. 102 to be used as references in formulating implementation regulations

Thank you!