Social Security and Benefits in Indonesia (Employment)

Overview

Indonesia's social security system is primarily governed by Law No. 40 of 2004 on the National Social Security System (SJSN) and Law No. 24 of 2011 on the Social Security Administering Body (BPJS). The system aims to provide social protection for workers and their families.

Key Components of Social Security

1. BPJS Ketenagakerjaan (Employment Social Security)

   • Coverage: Mandatory for all employees in the formal sector.
   • Benefits:
     • Work Accident Insurance (Jaminan Kecelakaan Kerja - JKK): Covers medical expenses and compensation for work-related injuries.
     • Death Insurance (Jaminan Kematian - JK): Provides benefits to the family of deceased workers.
     • Old Age Savings (Jaminan Hari Tua - JHT): Savings for retirement, accessible at retirement age or under certain conditions.
     • Pension Benefits (Jaminan Pensiun - JP): Monthly pension payments for retired workers.

2. BPJS Kesehatan (Health Insurance)

   • Coverage: Mandatory for all citizens, including foreign workers.
   • Benefits: Comprehensive health coverage, including outpatient and inpatient care, preventive services, and maternity care.

National Regulations

• Law No. 40 of 2004: Establishes the framework for the National Social Security System.
• Law No. 24 of 2011: Regulates the establishment and operation of BPJS.
• Government Regulation No. 44 of 2015: Details the implementation of employment social security.

General Costs

• Contributions:
  • BPJS Ketenagakerjaan: Employers contribute approximately 3.7% of the employee's monthly salary, while employees contribute about 2% for JHT and 1% for JP.
  • BPJS Kesehatan: The contribution is around 5% of the employee's salary, with 4% paid by the employer and 1% by the employee.

Standard Procedures for Accessing Benefits

1. Registration: Employers must register their employees with BPJS Ketenagakerjaan and BPJS Kesehatan within 30 days of employment.
2. Claiming Benefits:
   • For Work Accident Insurance: Submit a claim form along with medical reports and proof of employment.
   • For Death Insurance: Family members must provide a death certificate and proof of relationship.
   • For Old Age Savings: Employees can claim upon reaching retirement age or under specific conditions (e.g., permanent disability).
   • For Health Insurance: Present BPJS card at healthcare facilities for services.

Country-Specific Considerations

• Foreign Workers: Foreign employees must also enroll in BPJS Ketenagakerjaan and BPJS Kesehatan. Employers are responsible for ensuring compliance.
• Informal Sector: Workers in the informal sector are encouraged to participate in voluntary BPJS programs.
• Cultural Sensitivity: Understanding local customs and practices is essential when navigating the social security system, especially in rural areas where access to information may be limited.

Conclusion

Understanding Indonesia's social security and benefits system is crucial for employees and employers. Compliance with registration and contribution requirements ensures access to essential services and protections for workers.