Kuala Lumpur: Without insurance coverage, a family or individual may face financial pressure in the event of a disaster, particularly involving health or property. In Malaysia, aside from insurance offered by the private sector – which usually involves high monthly premium payments – the public can obtain similar protection from the Social Security Organisation (Socso). Socso, an agency under the Ministry of Human Resources, provides social security protection to Malaysian employees who, through small monthly contributions, are entitled to benefits such as accident compensation, medical treatment, and disability allowance. It even provides assistance to those who lose their jobs. The organisation is also actively involved in rehabilitation, retraining, and workforce employability programmes. Amid the shifting employment landscape, Socso is enhancing its role in protecting the security and well-being of the nation’s workforce.
According to BERNAMA News Agency, INCEIF University Centre of Excellence for Research and Innovation in Islamic Economics director (interim) Mohd Zaidi Md Zabri shared his views on the mandatory nature of monthly contributions to Socso for most workers. Comparing Socso with private insurance companies, he highlighted that Socso is a non-profit-oriented organisation offering protection under its Employment Injury Scheme, Invalidity Scheme, and Employment Insurance. In contrast, private insurance schemes are optional and profit-driven, with coverage plans based on premium payments made by policyholders. Mohd Zaidi emphasized that while private insurers’ benefits depend on the policy type, Socso provides a comprehensive protection package to contributors regardless of their financial background.
He added that Socso’s protection is inclusive, extending coverage to self-employed individuals, including housewives and gig economy workers, through its Self-Employment Social Security Scheme (SKSPS). Under this scheme, self-employed individuals pay RM70 per year, which is 30 percent of the total contribution, with the remaining 70 percent funded by the government. This scheme allows the self-employed to enjoy social security protection at a low cost with comprehensive benefits in cases of accidents, disability, or death while working.
Meanwhile, Universiti Sains Islam Malaysia Faculty of Economics and Banking senior lecturer Dr Mohd Faisol Ibrahim noted that Socso’s contribution system is rooted in the principle of justice, ensuring lower-income groups receive appropriate benefits. This is unlike private insurers, which operate based on profit motives and commercial risk assessments. He pointed out that Socso offers protection to all contributors without discrimination, promoting risk-sharing, brotherhood, and social solidarity. Dr Mohd Faisol highlighted Socso’s reforms over nearly 54 years to assist and ease contributors’ burdens through comprehensive social protection schemes.
Dr Mohd Faisol also suggested that Socso reevaluates its strategies from a macro perspective and considers introducing takaful-based products and services aligned with syariah principles. This move could make Socso more inclusive and responsive to societal needs, potentially positioning the agency as a new player in Malaysia’s takaful industry. He noted the opportunity for Socso to maximize syariah-compliant investments, which could generate stable returns and assure contributors of better benefits in the future.
Mohd Faisol urged Socso to simplify the claims process and improve standard operating procedures to ease contributors’ burdens during difficult times. He emphasized that a straightforward claims process could encourage more individuals, especially the self-employed, to contribute as part of their social safety net. He acknowledged that claims might be rejected due to various factors, including incomplete information and discrepancies in medical reports, and stressed the need for an efficient, transparent, and user-friendly system.
A 45-year-old Socso contributor, known as Wati, acknowledged complaints about the claims process, including complex documentation and long waiting periods. Despite these challenges, Wati expressed gratitude for receiving compensation after being laid off in 2023, noting that completing the forms was worthwhile as it provided financial relief during unemployment.