Updates on Indonesia’s Social Security Schemes

Posted by Written by Muhamad Aziz and Ayman Falak Medina Reading Time: 2 minutes

The Indonesian Government introduced the second amendment to Government Regulation No. 44 of 2015 concerning the Work Accident Benefit Program – “JKK”) and the Life Insurance Program – “JKM” through Government Regulation No. 49 of 2023 (GR 49/2023).

The changes aim to increase protection for workers from socio-economic risks support the government’s job loss security program, as well as clearly define the category of employees eligible for the JKK and the JKM programs. 

Eligible participants

GR 49/2023 divides JKK and JKM program participants into three categories:

  • Salary recipient participants who work for state administrators;
  • Salary recipient participants who work for employers other than state administrators; and
  • Participants who are not salary recipients.

Salary recipient participants are employees who receive a monthly salary and include employees in the public and private sectors. Salary recipient participants who work for state administrators are civil servants, government employees, members of the armed forces, state officials, as well as members of the police force.

Non-salary recipient participants are individuals, entrepreneurs, companies, and other entities that hire employees.

Changes to JKK and JKM premiums

The Indonesian government introduced the job loss security program (JKP) in 2021, the first of its kind in the country. Under the program, employees who have been made redundant and are eligible for unemployment benefits will receive cash stipends for up to six months, further skills training, and career guidance information.

Employees will contribute 0.46 percent of their monthly wages to the JLS program, of which 0.22 percent is contributed by the government and the remaining 0.24 percent from the employer.

The premium for the accidental death program is 0.14 percent of the employee’s monthly salary while the premium for the life insurance program is 0.1 percent of the employee’s monthly salary.

Under GR 49/2023, if the employee is registered with the JLS program, then the JKK premium is reduced by 0.14 percent, which will then be allocated to the JLS program.

Accident Insurance Premium

Risk level

Employees not registered in the JKP program

Employees registered in JKP Program

Very low risk

0.24% of monthly salary

0.10% of monthly salary

Low risk

0.54% of monthly salary

0.40% of monthly salary

Medium risk

0.89% of monthly salary

0.75% of monthly salary

High risk

1.27% of monthly salary

1.13% of monthly salary

Very high risk

1.74% of the monthly salary

1.60% of monthly salary

The accident insurance premium is calculated based on the risk level of the employee’s job. The higher the risk of an accident to occur at their place of employment, the higher the premium.

Accidents and illnesses suspected of being work-related

GR 49/2023 stipulates that health services for accidents or illnesses suspected to be caused by the employee’s job will be covered by the Worker’s Social Security (BPJS Ketenagakerjaan). If proven to be work-related, all health services will be covered by the Workers Social Security as part of the JKK program benefits. However, if it is not work-related, health service costs must be paid by the employee, the Social Security Administrator for Health (BPJS Kesehatan), or other insurance providers.

Impact on businesses

Companies must again carefully understand the criteria for eligible participants as well as premium payment obligations as regulated in the regulation. This requires updating internal policies and company administration systems to comply with the new provisions. By making these updates, companies can ensure that they comply with regulations appropriately and avoid the risk of sanctions or violations.

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