19 June 2016

Understanding SOCSO. And, NEW Rate of Contributions effective June 2016 ???

Are you a salary-based employee? Are you earning more than RM3,000 a month? Then, you should know the latest rate of contributions for SOCSO, because your net salary will be lesser and don't be surprised when you receive your paycheck by the end of this month onwards.

First of all, what is SOCSO ???
SOCSO was mandated to administer and enforce the Employee Social Security Act 1969 and Employee Social Security General Rules 1971. Through the Act and Regulations, SOCSO is able to provide free medical treatment, a facility for physical or vocational rehabilitation, and financial assistance to employees if they have lost their abilities due to accidents or diseases that have reduced their abilities to work or rendered them incapacitated. If an employee has died, their dependants are provided for financially through pensions.

Wait... What's Employment Injury Scheme ???

“Employment Injury” means a personal injury to an employee caused by accident or an occupational disease arising out of and in the course of his employment in an industry to which this Act applies. Remember the word "work-related injury". The protection under this scheme covers the following accidents:-

  1. Industrial accidents while carrying out their duties
  2. Accidents while traveling :-
    • On a route between his place of residence or stay and his place of work
    • On a journey made for any reason which is directly connected to his employment
    • On a journey between his place of work and the place where he takes his meal during any authorized recess
  3. Accident during emergency
    • An accident happening to an employee while he is in or near any premises at which he is being employed and it occurs while assisting, rescuing or protecting other people from disaster or danger during an emergency. Example: Fire disaster at employer's premise.

Okay... How about Invalidity Scheme ???

An insured person shall be considered as suffering from invalidity by reason of the specific morbid condition of permanent nature either incurable or is unlikely to be cured and no longer capable of earning, by work corresponding to his strength and physical ability, at least 1/3 of the customary earnings of a sound insured person.

The scheme provides 24-hour coverage to an employee who suffers from invalidity or death due to any cause and not related to his employment.

My net salary will be lesser ???
Yes, if you're earning RM3,000 and above. However, you're not being affected if earning below RM3,000. This is because, under the revised contribution table, the maximum rate of contribution was raised from RM3,000 to above RM4,000 monthly salary which is from a maximum rate of RM14.75 to RM19.75 for an employee. An increase of RM5 monthly, which translates to 33.9% jump !!!
Anyway, RM5 is not much la for you. Some more, you don't have the choice, unless you decided to quit your job and do business yourself, though. Happy Working!

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