How Does SOCSO Benefit You?

Upon receiving your monthly salary, you will notice a small deduction on your payslip for SOCSO. Unlike EPF which is known to ease your retirement day, SOCSO seems to be less familiar among employees. We’ve seen the amount deducted on our monthly paycheck but how many of us actually know what are the benefits of SOCSO?

What is SOCSO?

The Social Security Organisation (SOCSO) or also known as Pertubuhan Keselamatan Sosial (PERKESO) is a Malaysian agency governed under the Employees’ Social Security Act 1969. It was established in 1971 under the Ministry of Human Resources to provide social security protection to employees. You can get to know more about SOCSO here.

Is SOCSO mandatory?

All private companies in Malaysia are required to register with SOCSO within 30 days from the day the first employee joins the company. It is also compulsory for all Malaysians and permanent resident employees to register with SOCSO. However, SOCSO contribution is not mandatory if you are:

  • Federal and State government employees
  • Domestic workers
  • Self-employed (except for taxi drivers, e-hailing and bus drivers)
  • Spouses of a sole proprietor or a partnership owner

Previously, foreign workers are exempted from SOCSO protection. But starting January 2019, all of them have to be registered with SOCSO for coverage under the Employment Injury Scheme for foreign workers.

Why is SOCSO important?

You can consider SOCSO as an insurance policy offered by the government. Why do you need insurance in the first place? It’s definitely to protect you in case of any unprecedented misfortune. That’s how SOCSO works too. SOCSO is there to protect and compensate you against any occupational accidents and even death. Imagine if you suffer injuries from a road accident when commuting to your workplace. With SOCSO, you’ll receive assistance with getting your medical and follow up treatments covered.

Benefits of SOCSO

Contributing to SOCSO doesn’t only benefit you but your family as well. There are two protection schemes under SOCSO for its registered members which are:

Employment Injury Scheme

The Employment Injury Scheme protects the employees against any workplace accidents or diseases that arise during their employment period. The benefits provided for the member under this scheme are:

  • Medical Benefit
  • Temporary Disablement Benefit
  • Permanent Disablement Benefit
  • Constant-attendance Allowance
  • Facilities for Physical / Vocational Rehabilitation
  • Dependants’ Benefit
  • Funeral Benefit
  • Education Benefit

The employer must report the accident to the nearest SOCSO office within 48 hours for the employees to receive the above benefits.

Invalidity Pension Scheme

The Invalidity Pension Scheme provides 24-hour coverage to employees who suffer terminal illness or death due to any cause even if it’s not related to their employment. The illness may include cancer, stroke or any incurable diseases that prevent them from earning a living. This scheme ensures the employee, as well as the dependent family, receives the aid needed. The registered members under this scheme have a right to several benefits such as:

  • Invalidity Pension
  • Invalidity Grant
  • Constant-attendance Allowance
  • Survivors’ Pension
  • Funeral Benefit
  • Facilities for Physical / Vocational Rehabilitation and Dialysis
  • Education Benefit

Two categories of SOCSO contribution

There are two categories of SOCSO contributions. The first category provides the coverage of both schemes while the second offers the coverage of the first scheme only.

Employment Injury and Invalidity Scheme

Employees who are eligible for SOCSO and age below 60 years old should contribute under this category, excluding those aged 55 years old and above with no prior contribution. The rate of contribution for this category would consist of 1.75% employer’s share and 0.5% employee’s monthly wages. This means only a percentage of 0.5% will be taken out from your paycheck for the contribution.

Employment Injury Scheme Only

For employees aged 55 years and above with no prior contribution are not eligible for the first category. However, they will be contributing to this category instead. This second category is also for employees aged 60 years old and above. SOCSO members with invalidity pension receiving less than one-third of their average monthly salary before the invalidity also fall under this category. A percentage of contribution to this category won’t be extracted out from your paycheck. Instead, the employer will have to bear the contribution cost at 1.25% of your monthly salary.

Optimise your SOCSO benefits

Once you’ve become a registered member of SOCSO, it’s important to know what benefits you are eligible for. You will not only receive free medical treatments at selected panel clinics if you suffer from employment-related injuries but you can also provide your family with a financial cushion after your demise. For that, don’t forget to maximise the benefits of SOCSO and secure your financial well-being.

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