Malaysia's Social Security Act amended

Eligible employees in Malaysia, who are earning RM5,000 and above, are now entitled to protection coverages such as temporary disability benefits and retirement pension.

Malaysia's Employees’ Social Security Act 2022—which aims to protect eligible employees through safety, health, and welfare benefits under the Social Security Organisation (SOCSO)—has been amended and approved in parliament, the Dewan Rakyat, on 21 July 2022 (Thursday).

With the approved amendment, eligible employees in Malaysia, who are earning RM5,000 and above, will be entitled to protection coverages such as temporary disability benefits, permanent disability benefits, disability pensions, and retirement pensions, translated from higher employer-employee contribution rates.

Previously, the Act was limited to eligible employees who are earning RM4,000 and above, as seen in Third Schedule, Section 6, Point 45.

Per the latest amendment, Point 45 will officially be replaced with "when wages exceed RM4,000, but not RM4,100". It will be then followed by "when wages exceed RM4,100, but not RM4,200" until "when wages exceed RM5,000". As well, these groups are subjected to respective employer-employee contribution rates, with the highest employer contribution rate at RM61.90.


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According to Bernama's report, Minister for Human Resources M. Saravanan said in parliament that the amendment was "apt" as it would give wider protection to those earning more than RM4,000 to RM5,000 as the cost of living has now increased. And, on Facebook, he later described the Bill as a platform to "give a targeted impact where it guarantees social welfare recipients of existing and new benefits".

With this in mind, cited in the report, the Minister shared the specifics in parliament: "An employee who is 30 years old and earns more than RM5,000is eligible to receive permanent disability benefits, and the calculation of the lump sum payment for that employee according to the existing salary ceiling amounts to RM177,252.30."

"Based on the calculation of the new salary ceiling, the employee will receive a total of RM222,126.30. In this regard, there is an increase of 25.3% for the new salary ceiling compared to the existing salary ceiling."

The Minister also shared that, as of December 2021, there are 19.7mn eligible employees in Malaysia, and 1.94mn eligible foreign employees registered in SOCSO's system. In those numbers, there is protection to a total number of 678,329 beneficiaries. With regard to benefit payments, Minister Saravanan revealed that it amounted to RM4.334bn, as of 2021.

“As of May 2022, the beneficiaries comprised 664,265 employees with payments amounting to RM1.958bn," he added.

"For employees involved in accidents, they are eligible to receive benefits under SOCSO during the first month of work even if they have not contributed yet. When they receive an offer letter, even if they have not contributed, they are still eligible."

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Image / Minister Saravanan's Facebook

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