BPJS Ketenagakerjaan to Cover Informal-Sector Workers as of July

BY :FERIAWAN HIDAYAT

JUNE 18, 2015

Jakarta. The Social Security Administration Body for Employment, or BPJS Ketenagakerjaan, announced on Thursday that it would officially start insuring workers without a regular salary as of July 1.

The occupations included in this classification range from informal-sector workers such as motorcycle taxi drivers and street vendors, to the self-employed such as doctors and notaries.

BPJS Ketenagakerjaan, previously known as Jamsostek, or the state pension fund, is now a government agency that provides cover for occupational accidents, retirement savings, and life insurance.

“Non-formal workers can voluntarily undertake savings for the old-age scheme and pension scheme as of July 1,” the body said in a statement on Thursday.

Subscribers must pay a monthly premium of Rp 14,666 ($1.10), or Rp 489 per day, to qualify for BPJS Ketenagakerjaan’s insurance scheme.

The agency has 16.7 million subscribers to date, most of them formal-sector workers with a regular monthly salary.

Indonesia’s labor force is estimated at 110 million, according to the Central Statistics Agency (BPS), of whom only 42 million work in the formal sector.

The majority, working in the informal sector, are typically denied access to financial services such as loans and insurance because of their irregular income.

However, the 2004 and 2011 laws undergirding the establishment of BPJS Ketenagakerjaan stipulate that the government agency must provide coverage to all citizen, regardless of income status.

The agency said it would provide the same insurance services to informal-sector workers as to formal-sector ones, including a life insurance payout of Rp 24 million, plus Rp 12 million for each dependent child. This benefit, though, is only available if an individual has been a subscriber for at least five years.

BPJS Ketenagakerjaan also said on Thursday that it was offering online services for registering new subscribers and paying out claims. It is also working with retail outlets, state post offices and banks to take insurance premium payments from customers.

The agency formally introduced its new services on Wednesday in the city of Serang, in Banten province.

The province’s acting governor, Rano Karno, said BPJS Ketenagakerjaan must inform the public about the program and promote its benefits, especially for workers in the informal sector, who are often wary of spending money on insurance.

Rano said he was upbeat that BPJS Ketenagakerjaan would sign up a large subscriber base in his province, which has a population of 11.5 million and labor force of 5.7 million. Of that latter figure, 2.62 million work in the informal sector.

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