While most people are aware of what EPF is, SOCSO seems to be less popular in terms of awareness and familiarity. A portion of a person’s monthly income is allocated for SOCSO from both employers and employees but what are you paying for?
SOCSO was incorporated to provide assistance both medically and financially to employees that have had their abilities reduced or incapacitated due to accidents or diseases. They also provide assistance through pensions to the dependents of employees if they die.
Source: https://www.thestar.com.my
Employment Injury Scheme Benefits
This scheme provides coverage and protection for employees who suffer from employment injury.
• Medical benefits
• Temporary disablement benefit
• Permanent disablement benefits
• Constant-attendance allowance
• Rehabilitation benefit
• Return to work programme
• Dependent benefit
• Funeral benefits
• Education benefits.
Also important to note that employees that have stopped contributing to SOCSO might still be covered if they fulfil certain conditions. A fact that has gone unnoticed by many.
Invalidity Pension Scheme
This scheme covers employees who experience invalidity and death due to any causes not related to their employment. Invalidity implies the inability of an employee to achieve one-third of the customary earnings of a sound insured person. This inability may take the form of permanency or it’s very unlikely to recover.
The benefits that could be attained are:
• Invalidity pension
• Invalidity grant
• Survivors' pension
• Funeral benefit
• Facilities for Physical Rehabilitation and Dialysis
• Education Benefits
The survivors' pension is also an important piece of information for those who assume that the pension will stop once the employee has passed away. Through the survivors' pension scheme, dependent family members can apply to have it transferred to them.
SOCSO has issued health checks vouchers to 2.2 million Malaysians. However, results have shown that a staggering 1.7 million (77.3% of the eligible candidates) eligible for the free medical health check have declined the said initiative.
SOCSO contribution is compulsory for all Malaysian employees with monthly salaries lower than RM3,000. However, it is optional for those with starting salaries above RM3,000. Owing to the "once in always in" principle, a SOCSO member who has contributed to SOCSO will continue to be a member even when salaries have increased to over RM3,000.
First Category: Employment Injury And Invalidity Schemes
• All employees below 60 years old are required to participate in this category.
• Only 0.5% of employee’s monthly wages is to be extracted for the contribution.
Second Category: Employment Injury Scheme Only
• Employees who 60 years old and above and still working
• Employees above 55 years old who have made their first SOCSO contribution
• Insured Person receiving Invalidity Pension and still working and receiving less than 1/3 of the average monthly wages before the invalidity
• Employer to bear the contribution costs to SOCSO at 1.25% of monthly wages
Recently, SOCSO made a statement that it paid out RM1.3 million compensation to 764 delivery riders who were involved in accidents. The payments covered temporary and permanent disability benefits, medical expenses, dependent benefits, as well as funeral expenses. On average, the payment was just RM1,700 per person. For Covid, payout was RM11.2 million for 15,036 people or RM745 per person. And it took 2-3 months to process and payout. Imagine a funeral will have to wait for 2-3 months? And the payout sum per person is pathetic! How can dependents survive?
And when it comes to withdrawal, there is no such thing. This is one insurance scheme with no surrender value! If you have paid all your working life and not claimed, too bad, your bad luck? There is need for reform of this scheme and incentives for employers and employees to contribute, not the “big” stick approach. Meanwhile, it remains underutilised or unutilised till there is a serious campaign to raise awareness and/or change its workings!
References:
5 things you should know about SOCSO (https://loanstreet.com.my)
Awang: RM1.3 mil in SOCSO compensation given to over 700 delivery riders, Focus Malaysia, 16 Jan 2022
Socso paid RM11.19 million in compensation to those infected with Covid-19 at workplaces, The Star, 26 Sept 2021
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