Indonesia - Income security for the working age population

Income security in case of termination of employment

• Target: all workers.
• Benefits: upon termination of employment, regardless of the reason, the employer is obliged to provide lump-sum severance pay and long-service pay. The amount of severance pay varies depending on the length of employment. According to the law, the amount should be one month of wages for employment of less than one year, two months of wages for employment of between one and two years, three months of wages for employment of two to three years, and so on to a maximum of eight years of employment. Those employed for more than eight years will receive a severance pay of nine months of wages.

 

Income security in case of sickness and maternity

* Labour Law No. 13/2003

• Target: in principle, all formal sector workers.
• Benefits: according to Labour Law No. 13/2003, employers are obliged to pay full salary to their employees in case they are absent because of sickness. Employees cannot be terminated because of sickness unless they are absent for at least 12 months. Female employees should be given three months of paid leave during childbirth. Civil servants are entitled to similar provisions.

* Askesos - Sickness grant tor informal economy workers

• Target: all informal economy workers.
• Benefits: in case of sickness or injury, workers receive IDR 300,000 (maximum one claim per person and per benefit per year).

 

Employment injury

* Jamsostek occupational injury (JKK)

• Target: compulsory for all formal private sector employees.
• Benefits: employment injury insurance covers accidents at work, occupational disease arising out of employment, and travel accidents that occur while traveling to and from work following the usual rout. The contribution is fully paid by employers and ranges from 0.24% to 1.74% of wages, depending on the level of risk and protection.

* Jamsostek for construction workers

• Target: construction workers In 2010, 4,3330,383 workers were registered in this programme.
• Benefits: It provides occupational injury and death insurance for the period of the work contract.

* Jamsostek pilot programme for informal economy workers

• Target: informal sector workers.
• Benefits: the Jamsostek pilot programme, piloted since 2006, includes occupational injury benefits. The contribution for the occupational injury benefit is set at 1% of income, where "income" is set at the minimum wage level of IDR 1 million per month.

* Askesos (see above)

 

Death benefit

*Jamsostek death benefit for formal sector workers (JK)

• Target: formal sector workers.
• Benefit: based on Government Regulation No. 14/1993, in case of death during active employment (whatever the cause), the dependents of the deceased employee are provided benefits which include a lump sum of IDR 10 million, a funeral grant of IDR 2 million, and monthly transfers of IDR 200,000 per month for 24 months. The contribution to the death grant is made only by the employer, amounting to 0.3% of wages.

* Askesos for informal sector workers

• Target: informal sector workers.
• Benefits: the death benefits amounts IDR 400,000 if the member dies in the first year of the membership, IDR 600,000 if death occurs in the second year of membership, or IDR 800,000 if death occurs in the third year of membership. The scheme was modified in 2012 (on a pilot basis) to provide lump sum and periodic payments in case of death of the insured. The new pilot scheme is administered by Jamsostek.

*Jamsostek pilot programme for informal economy workers

• Target: informal economy workers earning at least the minimum wage (approximately IDR 1 million per month, but subject to variations across provinces).
• Benefits: the jamsostek pilot programme for informal economy workers, piloted since 2006, includes death benefits. The contribution for the death benefit is set at 0.3% of the minimum wage.

 

Income security for working age populations who are undermployed: community empowerment, job training, microcredit programmes

* The national community empowerment programme (Program Nasional Pemberdayaan Masyarakat – PNPM)

• Target: communities in poor districts and sub-districts.
• Benefits: under the PNPM programme, control over development project planning, design, implementation, and monitoring is given to local communities.

* Vocational training programmes (Balai Latihan Kerja – BLK)

• Target: formal and informal sector workers.
• Benefits: The Ministry of Manpower and Transmigration (MoMT) oversees Technical and Vocational Education and Training (TVET) centres known as Balai Latihan Kerja (BLK). The BLK centres provide vocational training and job placement services. Courses are provided free of charge, though a few BLK centres also provide non-subsidized courses.

* Microcredit programmes

• Target: poor and micro-enterprises.
• Benefits: the government's microcredit programme is intended to provide the poor and micro-enterprises with access to affordable credit. The credit for the poor programme, Kredit Usaha Rakyat (KUR), is a programme in which six participating commercial banks provide loans to micro-enterprises and cooperatives with a guarantee scheme in which 70% is subsidized by the Government.

* Employment creation programme (Padat Karya)

• Target: local communities
• Benefits: the term Padat Karya, which means "labour intensive", has been used throughout Indonesia to refer to village infrastructure activities that employ workers entirely from the local community^[1]. New infrastructures are built providing support income to the unemployed and the poor.

* Infrastructure development programme

• Target: 23 provinces.
• Benefits: the programme is aimed at meeting basic needs and achieving competitiveness of Indonesian products. The projects under the programme will be implemented by the private sector through public-private partnership (PPP) arrangements.

* Provincial programmes

• Target: poor households or communities not covered by national programmes.
• Benefits: different income security and community empowerment programmes for the poor are run by different provincial or district governments.

* Livelihood programmes by various line ministries

• Target: rural communities.
• Benefits: several line ministries have various livelihood and income generation programmes for rural communities (for example, in agriculture and plantation, fishery, animal husbandry, among others). These programmes comprise of trainings, grants, or credit for business capital (in cash or in kind such as seeds, livestock, or irrigation).

 

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_{[1] Perdana A., Maxwell J., 2004. Poverty Targeting in Indonesia: Programs, Problems and Lessons Learned, Economics Working Paper Series, available at www.csis.or.id/papers/wpe083.}

Social security schemes and programs by branch