Jakarta, 13 December 2011 Sinta Satriana Social Protection Assessment Based National Dialogue in Indonesia: Existing schemes, gaps, recommendations and scenarios Jakarta, 13 December 2011 Sinta Satriana

< 1% of informal economy covered by Jamsostek pilot program Health “Official” Coverage Jamsostek: 18% of private sector employees 100% of civil servants / police / military & families < 1% of informal economy covered by Jamsostek pilot program Jamkesmas and Jamkesda: 100% poor & near poor covered Near poor & Poor Private sector Civil serv Formal Economy One third Informal economy One third two third

Jamsostek for informal Economy Health Real coverage 18% of private sector employees covered Jamsostek for informal Economy 100% of the civil servants / police / military & families through Askes Jamkesmas & Jamkesda, 50% of the poor through Jamkesmas & additional % through Jamkesda Near poor & Poor Private sector Civil serv Formal Economy One third Informal economy One third two third

Non-poor informal economy Health Coverage mandated by Law 40/2004: 100% Contribution paid by workers, in nominal amount Contribution paid by the government Contribution paid by workers&employers, in % of salary Near poor, Poor, disabled, unemployed Non-poor informal economy Formal Economy

Health Main gaps and implementation Issues: Main Recommendation Non poor informal economy workers and their families not covered Low coverage in the private sector, desoite mandatory participation Targeting issues lack data on beneficiaries and utilization of Jamkesmas Unclear benefit package in Jamkesmas leading to unanticipated out-of-pocket payments Exclusion of diseases such as HIV and cancer Main Recommendation Develop a specific benefit package for the Jamkesmas program and Improve database system Improve linkages with Health Care supply (reception of patients, payment system of the hospitals…) Increase enforcement of Jamsostek Law in the private sector Increase coverage of Informal Economy workers through the design of adapted enrolment & contribution mechanisms, a mapping of IE workers, the expansion of Jamkesmas to a larger population, the development of regulations to implement Law #40, 2004, etc.

Costing Exercise Low Scenario: Costs 0.27% of GDP b 2020 Extension of Jamkesmas to the uncovered poor due to mis-targeting (Current Jamkesmas cost assumption) Inclusion of HIV treatments and checkups for all active age population Introduction of a universal package to reduce Mother to Child HIV Transmission Costs 0.27% of GDP b 2020 Near poor & Poor Non-por Informal Private sector Civil serv One third One third One third

Costing Exercise High Scenario: Costs 0.76% of GDP by 2020 Health care for all informal economy population, higher level of benefits based on WHO’s report of the Commission on Macroeconomics and health (USD 49, 2011 price) Inclusion of HIV treatments and checkups for all the population Introduction of a universal package to reduce Mother to Child HIV Transmission Costs 0.76% of GDP by 2020 Near poor & Poor Private sector Civil serv Formal Economy One third Informal economy two third One third

Universal coverage of BOS Children The “official” coverage 4.1 million very poor students receive scholarships 17% of the poor HH covered by PKH Small child allowances for civil servants PKSA Universal coverage of BOS Raskin Near poor & Poor Private sector Civil serv Formal Economy One third Informal economy One third two third

Universal coverage of BOS Children The “real” coverage Raskin and Scholarships have targeting errors scholarships 17% of the poor HH covered by PKH Low family allowances for civil servants PKSA Universal coverage of BOS Raskin Near poor & Poor Informal economy Private sector Civil serv

Children Gaps and Implementation Issues: Main recommendation Limited coverage area of the PKH program Insufficient supply of health and education services to ensure fulfillment of the PKH conditionalities Lack of reliable data and efficient targeting mechanisms Despite BOS allocation, schools still apply extra fees in practice Unclear targeting mechanism of the Scholarship for the poor program Main recommendation Extend the coverage of the PKH and scholarship programs, and calculate the corresponding costs Explore the possibility of introducing a universal child allowance, and calculate the corresponding cost Increase availability of Schools and Health care services in remote areas Develop more linkages between access to health, nutrition and education Improve targeting and data collection under all programs Reduce administrative costs of Raskin Explore the merger of PKH and Scholarship program to avoid duplication

Universal coverage of BOS Children Low Scenario Extension of the PKH program to all poor households (and not only the very poor households) Will cost 0.05% of GDP by 2020 scholarships Low family allowances for civil servants PKSA PKH Universal coverage of BOS Raskin Near poor & Poor Informal economy Private sector Civil serv

Universal child allowance Children High Scenario Universal child allowance (400,000 IDR/year, 2011 price) Will cost 0.2% of GDP by 2020 Universal child allowance Near poor & Poor Informal economy Private sector Civil serv One third One third One third

Working Age Current coverage If the legislation was enforced the total private sector would be covered 33% of private sector covered in work injury, sickness& death Jamsostek pilot program for informal (injury & death): <1% 100% of the civil servants / police / military Scattered interventions (Asekesos, PNPM, KUR, BLK, …) Near poor & Poor Private sector Civil serv Formal Economy One third Informal economy two third One third

Working age Coverage mandated by Law 40/2004: 100% Informal economy Contribution paid by workers, in nominal amount Contribution paid by workers & employers, in % of salary Informal economy Formal Economy

Working Age Main Gaps and Implementation Issues Almost no income security measures for informal economy workers and extension of the Jamsostek pilot scheme is very slow Limited coverage of formal sector workers due to high evasion Severance pay provides insufficient protection compared to unemployment insurance Lack of harmonization of the maternity benefits for formal employees Low coverage and low level of protection under the Askesos program The provision of income security benefits is rarely linked with measures to increase employability, facilitate job creation or return to employment

Working Age Main Recommendation: Improve enforcement of the Labor Law to reduce evasion (explore the TWIN system) Feasibility study of an unemployment insurance scheme Develop linkages between Public Employment Programs and skills development Explore the possible introduction and calculate the cost of a maternity benefit for women in the informal economy Design and pilot test a Single Window Service mechanism for workers in the informal economy that would : Facilitate their registration and access to social protection and employment services Assess their vulnerability and skills needs Ensure proper monitoring and evaluation of existing programs Enhance coordination between institutions and interventions

Minimum income security through integrated PWP & skills development Working Age Scenario Establishment of a public works program linked with vocational training (30 days of work, minimum wage, vocational training) Minimum income security through integrated PWP & skills development Would cost 0.35% of GDP by 2020 Near poor & Poor Private sector Civil serv Formal Economy One third Informal economy two third One third

< 1% of informal economy covered by Jamsostek pilot program Old age and disability protection coverage Allowance for elderly with no family support (1% of estimated need) 33% of private sector employees, Jamsostek saving Severe disability allowance 100% of the civil servants / police / military: Pension and savings < 1% of informal economy covered by Jamsostek pilot program Nursing home subsidy Near poor & Poor Informal economy Private sector Civil serv One third One third One third

Old age and disability Law 40/2004: Old age saving for all workers and periodical pension for formal workers Old age savings, contribution in nominal amount Pension and old age savings, contributions in % of salary Formal Economy One third Informal economy two third One third

Elderly and Disabled Main Gaps and Implementation Issues Almost no income security provisions for the elderly in the informal economy High evasion in the private formal sector Old age lump sums do not provide adequate protection The sustainability of the unfunded defined-benefit scheme for civil servants is questioned The coverage of the non-contributory minimum pension program is limited Lack of harmonized definition of disabled people (across Ministries, BPS, etc.) Lack of comprehensive and comparable database with a clear classification of the disabled people

Elderly and Disabled Recommendations Conduct a Feasibility study of a defined benefit pension scheme for formal sector workers Explore the possible extension and calculate the cost of a non-contributory minimum pension scheme for the elderly and people with permanent disabilities Create a comprehensive database of disabled people and elderly, to facilitate targeting Increase the budget allocation to nursing and other charitable homes

Low Scenario: Extension of existing non-contributory pension scheme for all severely disabled persons and all vulnerable elderly (i.e. without family support) would cost 0.09% of GDP by 2020 Allowance for elderly with no family support Severe disability allowance Near poor & Poor Informal economy Private sector Civil serv One third One third One third

High scenario Universal pension at the level of poverty line Would cost 0.95% of GDP by 2020 Near poor & Poor Non-poor Informal Private sector Civil serv One third One third One third

Thank you Sinta Satriana sintasatriana@yahoo.com