Indonesia

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Situation and Priorities

Social protection situation

Medical care: The health insurance scheme (JKN) was established in 2014, and covers 88% of residents or 243 million.

Maternity and sickness benefits: No social protection scheme is available. Employers are liable to pay salary for these contingencies.

Unemployment benefit: The unemployment insurance scheme (JKP) was established in 2021 and covers less than 32% of employees or 16 million. Several parameters must be improved. For example, coverage legally excludes many workers in micro-enterprises. An expiry of fixed-term contract is not a covered contingency. A second claim is penalised for 5 years.

Old-age, invalidity, and survivors’ benefits: A DB pension scheme (JP) was established in 2015, and 7% of working age population or 13 million. Several parameters must be improved. Adequacy is below the minimum standards. Coverage is limited to workers in the large and medium enterprises. The ILO is recommending reform options for creating a universal tier to cover all older persons and establishing a multi-tier pension system to improve adequacy. Policies for invalidity and survivors’ benefits must be reformed too.

Employment injury benefit: The employment injury insurance scheme (JKK) was reformed in 2015 and 2018, and covers 67% of employees or 34 million. Several parameters must be improved. Permanent disability benefit and survivor’s benefits are provided in a lump-sum payment for a prescribed period, while the minimum standards require 50% throughout the contingency and 40%, respectively.

Family benefit: The conditional cash transfers scheme (PKH) reportedly covers 10 million means-tested households.

COVID-19 and other crises

The Government responded to the COVID-19 crisis mainly by introducing new tax-funded schemes and expanding the existing tax-funded schemes. These schemes include the Village Funds Unconditional Cash Transfer Programme (BLT), the Food Assistance Programme (Sembako), the Pre-Employment Card Programme (Kartu Prakerja), The Conditional Cash Transfers Programme (Program Keluarga Harapa), the public works programme, the energy subsidy programme, and the wage subsidy assistance programme.

Government and social partner priorities

Extending old-age benefits to workers in informal employment: Establish a multi-tier pension system by creating a new universal pension tier for all residents, extending the DB pension scheme (Jaminan Pensiun) at least to all wage employees, and reforming the role of the DC contributory scheme (Jaminan Hari Tua).

Establishing a new maternity and paternity benefit scheme: Establish a new maternity and paternity benefit by replacing the current employer liability schemes by social insurance schemes.

Improving the unemployment insurance scheme: Reform the policy designs for the unemployment insurance scheme (Jaminan Kehilangan Pekerjaan) according to the international labour standards.

Improving the employment injury insurance scheme: Reform the policy designs for the employment injury insurance scheme (Jaminan Kecelakaan Kerja) according to the international labour standards.

Ratifying Convention 102: After complementing the abovementioned policy reforms, ratify the Social Security Minimum Standards Convention No. 102.

Just transition: Facilitate national consultations on just transition with special focus on adaptive social protection, care economy, inequality, and any other relevant topics to just transition.

ILO Projects and Programmes

Results

2015-16: Contributed analysis and inputs to the Government Regulation No. 45/2015 on the establishment of DB pension scheme (JP), through actuarial valuations.

2017-18: Facilitated and consolidated stakeholder’s inputs to the Minister of Manpower Regulation No. 18/2018 on social security for Indonesian migrant workers.

2019: Facilitated national tripartite dialogues to discuss policy options for an unemployment insurance scheme.

2020: Contributed analysis and inputs to the Law No. 11/2020 on the establishment of unemployment insurance scheme (JKP), through actuarial valuations, international case studies and policy analysis. Organized 46 training workshops, technical meetings, and dialogues with 531 government’s, worker’s and employer’s representatives.

2021: Contributed analysis and inputs to the Government Regulation No. 37/2021 and the Minister of Manpower Regulation No. 7/2021 on the implementation of unemployment insurance scheme (JKP). Organized 64 training workshops, technical meetings, and dialogues with 1,261 government’s, worker’s and employer’s representatives.

2022: Contributed analysis and inputs to the Law No. 4/2023 on the financial sector development and strengthening by submitting policy and actuarial recommendations on pension reforms; and also, to the Bill on maternal and childcare by recommending introducing maternity and paternity benefits based on social insurance principles. Organized 29 training workshops, technical meetings, and dialogues with 817 government’s, worker’s and employer’s representatives.

2023: Contributed analysis and inputs to the Government of Indonesia on the role of social insurance in the framework of Adaptive Social Protection roadmap; and added it in the Government's draft Long-term National Development Plan 2025-2045 (RPJPN).

News and Events

Workspaces

ILO Experts

IMG
Markus Ruck
Senior Social Protection Specialist
IMG
Christianus Panjaitan
National Project Officer
IMG
Ippei Tsuruga
Social Protection Programme Manager