Expats may opt out of insurance scheme<\/p>\n
JAKARTA (JP): More than 47,000 expatriates working in
\nIndonesia will no longer be obliged to participate in the social
\nsecurity program since they have been insured in their respective
\ncountries.<\/p>\n
Director General of Labor Placement Din Syamsuddin said that
\nthe government would no longer enforce the 1995 ministerial
\ndecree which makes the social security program compulsory for
\nforeign workers. He said the measure was taken to prevent foreign
\nworkers from taking out two insurance programs.<\/p>\n
\"That is why Minister of Manpower Fahmi Idris recently issued
\na ruling to lift the ministerial decree,\" he said Friday.<\/p>\n
He also said the minister recently issued another decree to
\nexclude Indonesian workers overseas from the social security
\nprogram as they would have been insured by local and foreign
\ninsurance companies. Bilateral agreements with several host
\ncountries require that working Indonesians are insured with
\ncompanies of the respective countries.<\/p>\n
Indonesia receives an average annual remittance of US$35
\nbillion from its one million workers overseas, mainly in the
\nMiddle East, Malaysia, South Korea and Japan.<\/p>\n
An executive of PT Jamsostek, the state-owned firm that holds
\nthe monopoly in social security provision, lamented the decrees,
\nsaying the company would lose a considerable sum of money.<\/p>\n
Supriyono, the head of the company's Jakarta office, said that
\naround 6,000 expatriates working in Jakarta alone contributed
\nabout Rp 2 billion (US$180,000) monthly to Jamsostek.<\/p>\n
After symbolically handing over Rp 235 million in pension
\nfunds for 41 workers dismissed by mining company Union Texas
\nLimited on Friday, he said Jamsostek had yet to learn the real
\nreasons behind their issuance.<\/p>\n
He questioned whether all expatriates working in Indonesia had
\nbeen insured in their home countries or whether Indonesian
\nworkers overseas were really insured with foreign insurance
\ncompanies.<\/p>\n
Supriyono said the decree went against the 1992 social
\nsecurity law which states that companies employing at least 10
\nworkers, regardless of whether they are local or foreign, must
\npay at least Rp 1 million in social security.<\/p>\n
Supriyono said that his company had paid Rp 182 billion to
\nmore than 57,000 workers dismissed since the crisis began.<\/p>\n
\"Jamsostek expects to pay around Rp 350 billion in pension
\nfunds to dismissed workers if the economy continues to worsen,\"
\nhe said. He added the company would pay pension funds to more
\nthan 3,500 employees dismissed by the national flag carrier
\nGaruda Indonesia.<\/p>\n
Ismoe Handoko, a legislator of the ruling Golkar faction, said
\nthe government should subsidize an increase in pension funds
\nbecause it had collected taxes from workers' monthly income.<\/p>\n
\"A Rp 6 million cash handout is too small for a dismissed
\nworker who has been employed for up to nine years amid the crisis
\nwhile he or she must support a family with two or three
\nchildren,\" said Ismoe, who is on House of Representatives
\nCommission V for labor and mining.<\/p>\n
Workers lose 5.7 percent of their monthly wages, which are set
\naside for their pensions at an interest rate of 11 percent.<\/p>\n
The rate is the lowest in Southeast Asia; Singapore sets aside
\n40 percent, Malaysia 23 percent and the Philippines 8.3 percent.
\n(rms)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/expats-may-opt-out-of-insurance-scheme-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}