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Together, the two measures will involve an expenditure of approximately RM 234mn.
Malaysia's Social Security Organisation (PERKESO, also known as SOCSO) has implemented a cost of living adjustment for all periodic benefit recipients, along with an increase in the minimum pension rate under the PERKESO Disability Scheme.
Effective 1 January 2023, the adjustments made to the periodic benefits and pensions are to help the beneficiaries cope with the rising cost of goods and services in the country. The implementation of these two initiatives under the Workers' Social Security Act 1969 (Act 4) is expected to benefit more than 456,000 PERKESO benefit recipients.
Recipients of the SOCSO benefits under the Occupational Disaster Scheme and Disability Scheme under Act 4 are as follows:
- Permanent disability benefit,
- Dependent's benefit,
- Pension in case of death for surviving nominee,
- Retirement pension.
The initiatives are an extension of the 11th Actuarial Assessment Study by the International Labor Organization (ILO), having take into account factors such as the current social and economic situation in Malaysia, the impact of the COVID-19 pandemic, increase in cost of living and increase in inflation rate.
Together, the two measures will involve an expenditure of approximately RM 234mn.
Cost of living adjustment
Per PERKESO's statement, the cost of living adjustment this round involves an estimated expenditure of RM213mn, and is expected to benefit more than 400,000 recipients.
From 1977, cost of living adjustments for PERKESO periodic benefit payments have been made 12 times under the Occupational Disaster Scheme and 10 times under the Disability Scheme. The adjustment rate for PERKESO periodical benefit recipients effective 1 January 2023 is between 0.7% to 9.4%, according to the accrued date (year of pension received) with the percentage adjustment as follows:
| Year pension was accrued | Adjustment rate (%) |
| Pension accrued before 2015 | 9.4 |
| Pension accrued in 2015 | 8.4 |
| Pension accrued in 2016 | 6.2 |
| Pension accrued in 2017 | 2.3 |
| Pension accrued in 2018 | 1.3 |
| Pension accrued in 2019 | 0.7 |
Minimum pension rate increase
On the other hand, the increase in the minimum pension rate under the Disability Scheme was increased from the previous existing rate of RM475 per month, to RM550 per month. This increase will benefit approximately 56,000 beneficiaries in coping with the rising cost of living. It will involve an expenditure of approximately RM21mn.
Through these changes, PERKSEO aims to ease the financial burden, improve well-being, and meet the socio-economic needs of PERKESO's beneficiaries.
Image / Shutterstock
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