Foreign workers in Malaysia now eligible for PERKESO’s Invalidity and Survivors’ benefits, a significant step for inclusive social security.
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| Migrant workers gain access to Malaysia’s social security benefits, including invalidity and survivors' coverage. Image Courtesy: ILO |
Kuala Lumpur, Malaysia — October 2, 2024:
Malaysia has extended its social protection coverage to include migrant workers, marking a significant step forward in ensuring equal benefits for all workers in the country. Effective 1 July 2024, foreign workers will now be eligible for the Invalidity and Survivors’ benefits under Malaysia’s Social Security Organization. This development comes after years of collaboration between Malaysia and the International Labour Organization (ILO), which has been a key partner in shaping this policy.
Simon Brimblecombe of the ILO highlighted the importance of this move, stating, “This is a major advance for social security in Malaysia, as it establishes a more inclusive framework that ensures no worker is left behind, regardless of nationality.”
The extension provides crucial financial support to migrant workers and their families, covering cases of invalidity and death. If a worker’s earning capacity is reduced by two-thirds or more, or if they pass away, their families will receive survivors’ benefits, helping to alleviate the financial burden. The scheme is part of Malaysia’s broader efforts to address its aging population and maintain a stable workforce by ensuring that all workers, including migrants, are protected.
PERKESO, which already extended its Employment Injury scheme to migrant workers in 2019, now manages three key social security programs, including the Employment Insurance and Invalidity and Survivors’ schemes. Contributions to these schemes are shared between employers and workers, with each contributing 0.5% of the worker’s salary.
The ILO has played a vital role in supporting this extension, providing evidence-based analysis and policy recommendations to ensure that the inclusion of foreign workers strengthens the financial sustainability of the PERKESO system. With Malaysia’s aging population and reliance on foreign labor, this inclusive approach is expected to foster a more equitable and productive economy.
However, challenges remain in ensuring full compliance and smooth implementation. PERKESO is working to ensure that both employers and workers are well-informed and can adapt to the new system by December 2024, when the grace period for payment contributions ends.
Looking forward, PERKESO and the ILO plan to continue their collaboration, focusing on expanding social protection, reforming pension systems, and establishing bilateral agreements for the portability of benefits for workers returning to their home countries. The ILO has also proposed that Malaysia consider ratifying ILO Convention 102, which sets international standards for social security.
This extension of coverage is seen as a significant milestone in Malaysia’s social protection journey, ensuring a fairer, more inclusive system for all workers.