SOCIAL SECURITY SYSTEM FOR INDIVIDUAL EXPATS IN INDONESIA ~ LIVING IN INDONESIA

Buddy,

Really pleased to see you again in 2015, wishing you a great Prosperous, Blissful, Healthy, Bright, Delightful, Energetic and Extremely Happy. Aamiin

At the moment, let me reveal about the social security system in Indonesia which has implication to expats employee... Keep stalking.

The majority of expats have not known about new regulation in regards with Indonesia social security system.They are however keeping the previous regulation which is about to end in the middle of 2015. The previous regulation was based on Minister of Manpower and Transmigration Regulation No. PER.02 / MEN / XII /2004 stating that employers do not have an obligation to register expatriates in JAMSOSTEK as long as the expatriates already have similar coverage in their home countries.Therefore,the majority of expats bring their own social security system when they are working in Indonesia.

The aforementioned regulation will probably become terminated since right now, as Indonesia has been undergoing reform on a social security system, effective January 1, 2014, based on Law No. 24/2011 regarding Social Security Administrators (Badan Penyelenggara Jaminan Sosial, or BPJS), which builds on Law No. 40/2004 regarding the National Social Security System (Sistem Jaminan Sosial Nasional, or SJSN).

WHAT IS NEW?

Currently, the Indonesian Government established the Social Security Organizing Body (Badan Penyelenggara Jaminan Sosial or “BPJS”) as part of the law.You can find two separate BPJS in Indonesia, one taking care of healthcare and some other managing work social security. The transition of the previous system is being carried out gradually.

Please be noted that Since January 1, 2014, Health Security has been managed by the BPJS of Health, while Social worker security has been managed by the BPJS of Employment overseeing;

· Work accidental security

· Death security

· Retirement security

To tell you the truth, the BPJS of Employment is actually similar to the current Jamsostek scheme, with providing the added benefit of Pension Security.

The point I must highlight below is (the most relevant paragraph for expats)

Anyone who has worked in Indonesia for at least six months, including foreign nationals, must be registered for both types of social security at the BPJS of Health and BPJS of Employment.

BY THE WAY, HAVE YOU EXCEEDED 6 MONTHS WORKING IN INDONESIA?

PREMIUM CONTRIBUTION

Area to be Covered	Percentage of regular salaries / wages
Area to be Covered	Borne by Employers	Borne by Employes
Working Accidental security **	0,24 – 1,74%	-
Death security	0,3%	-
Retirement security	3,7%	2%

**As for working accidental security, The percentage varies depending on the industry you are working for. For those who works for industry which consider to be high risk job, such as mining, oil and gas, etc will have the highest percentage of working accidental security amounting to 1,74% of regular salaries/wages.

REALLY MATTERS?

Under the new regulation, The changes of health insurance system, health-care system in Indonesia are significant for employers and employees covered. Why significant? You find out now that the changes will consequently require to undergo some administrative and cost implications for employers particularly multinational companies that already have opted out of either the prior JAMSOSTEK System or self insured (by using private insurance plans) for their employees.

As it is mentioned by the regulation that Indonesian expatriate employees (either Indonesian citizens or residents) who are working overseas are obliged to register the new health insurance system. Therefore this probably have double taxation implications when those Indonesian employees abroad are also needed to participate in their host-country plans.

I come across with so many question, one of which, the new regulation that applies to expat employee in Indonesia. I think it's better admit that our country has no Total social security agreement in place and from the viewpoint of expat program, you should preserve updated almost forthcoming signals from the authority in regards with the way the new plan will probably deal with expat employee in our country.

Cheers.