KUALA LUMPUR, Could 26 — For a lot of Malaysians, contributions to the Social Safety Organisation (Perkeso) are little greater than a routine deduction listed on their month-to-month payslips, quietly decreasing take-home salaries.
However economists say the scheme performs a far wider function in defending employees towards job loss, incapacity, office accidents and long-term earnings disruption.
A employee incomes the minimal wage of RM1,700 contributes RM8.50 a month to Perkeso, alongside RM3.40 to the Employment Insurance coverage System (EIS), whereas employers contribute RM29.75 to Perkeso and one other RM3.40 to the EIS.
Centre for Future Labour Market Research economist Zharif Luqman Hashim stated the system exists to make sure employees have primary social safety when sudden conditions come up.
Past office accidents, Perkeso’s Employment Harm Scheme covers each office and commuting-related accidents, whereas the Invalidity Scheme supplies round the clock safety in circumstances involving incapacity or loss of life.
The EIS, in the meantime, presents non permanent earnings assist and job-search help for employees who lose employment.
The system additionally contains rehabilitation assist, dialysis remedy, prosthetics and return-to-work programmes.
Zharif famous that in contrast to non-public insurance coverage, Perkeso operates as a obligatory social safety system the place contributions are pooled and linked to wages slightly than particular person well being dangers.
This implies lower-income employees and people in higher-risk occupations will not be excluded from protection.
“Protecting medical payments alone doesn’t resolve the actual downside most households face after an harm or sickness, which is the lack of earnings and work capability,” he stated.
He added that Perkeso’s function extends past healthcare assist by serving to injured employees regain employment and monetary stability.
Malaysia Institute of Financial Analysis senior fellow Azizul Amiludin stated non-public insurance coverage can’t absolutely substitute the operate of social insurance coverage techniques equivalent to Perkeso.
He defined that beneath regular actuarial assessments, employees in riskier occupations would probably face considerably larger insurance coverage premiums if protection depended solely on non-public insurance policies.
The report additionally highlighted rising stress on social safety techniques as Malaysia’s ageing inhabitants expands.
Malaysians aged 65 and above made up 8 per cent of the inhabitants in 2025, up from 7.6 per cent the earlier 12 months.
Azizul stated insurance policies encouraging older Malaysians to stay economically lively could change into more and more vital, though job alternatives should match their bodily talents and expertise.
He additionally warned that rising healthcare prices, demographic shifts and a doubtlessly shrinking contributor base might place added pressure on the system over time.
Presently, Perkeso’s contribution fee stays at 2.25 per cent, unchanged since its institution.
Sustainability measures have as a substitute targeted on elevating the wage ceiling from RM5,000 to RM6,000 slightly than rising contribution charges.
Zharif stated Perkeso must be seen as a long-term funding in labour drive stability slightly than merely a payroll deduction.
Azizul added that with out such a system, the monetary and social burden would finally fall on households and public welfare establishments.
“Social insurance coverage shouldn’t be seen merely as a person expense, however as a collective funding in social stability and financial resilience,” he stated.
