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Indonesia

Updated by Rachael Chadwick , Resya Kania , Tauvik Muhamad , Sinta Satriana , Sebastiano Snider , valérie schmitt on 04.03.2014

Indonesia strives to extend social protection coverage to the entire population. Since its amendment in 2002, the Indonesian Constitution recognizes the right to social security for all, and the responsibility of the State in the development of social security. Although the existing social protection schemes tend to be fragmented and scattered, progress is taking place towards a more comprehensive provision of social protection coverage.

An important milestone is the progressive implementation of the National Social Security Law (Law No. 40/2004 regarding the National Social Security System). The law mandates the extension of social security coverage to the whole population in the categories of health, work injury, old age, and death of the breadwinner. The Law follows a staircase approach with non-contributory schemes for the poor, contributory schemes for the self-employed, and statutory social security schemes for formal sector workers. Universal health insurance under the Law on Health Social Security Providers (BPJS Kesehatan - BPJS I) is expected to start in 2014, while other schemes, under the Law on Workers’ Social Security Providers (BPJS Ketenagakerjaan - BPJS II), are anticipated to start in 2015. On the social assistance front, efforts to extend coverage to reach the poorest and most vulnerable populations and to better coordinate among various programmes are in progress.

The existing social protection system mainly includes social security schemes and a tax-financed social assistance system (public welfare) as part of a broader set of antipoverty programmes and government subsidies.

Social security schemes are primarily managed by four state-owned limited liability companies or Perseroan Terbatas (PT):

  • PT Jamsostek is the social insurance fund for private sector employees. It provides four schemes: employment injury, death, health insurance, and an old age provident fund;

  • PT Taspen manages the civil servants’ retirement lump sum and pension programme;

  • PT Askes provides health insurance coverage for civil servants and retired military personnel;

  • PT Asabri provides lump sum retirement benefits and pensions as well as death and occupational injury insurance for the armed forces and the police.

The bulk of informal economy workers are left with almost no social protection. To a limited extent, Program Asuransi Kesejakteraan Sosial (Askesos), administered by the Ministry of Home Affairs, provides income replacement benefits to a few groups of informal economy workers such as street vendors and micro-entrepreneurs. There are also other small-scale pilot programmes such as the Jamsostek pilot programme for informal economy workers, Jamstostek Luar Hubungan Kerja (LHK), which provides work injury, old age, health care, and death insurance.

Social assistance is provided through a number of social welfare programmes providing access to education, health care, food security, social infrastructure, and employment opportunities. The programmes are implemented by various line ministries.

The Government classifies existing anti-poverty programmes into three clusters:

  1. The social assistance cluster aims to fulfil the basic needs of the poor and targets household units. Programmes included in this cluster are health insurance for the poor (Jamkesmas), rice subsidy for the poor (Raskin), conditional cash transfers (PKH), scholarships for the poor and social assistance for the disabled, the vulnerable elderly and abandoned children.

  2. The community empowerment cluster is intended to improve income among the poor through community involvement in the development process. The Program Nasional Pemberdayaan Masyarakat (PNPM) is the main actor in this cluster.

  3. The small and micro-enterprise empowerment cluster aims to support the development of small and micro-enterprises through access to credit. The main instrument of this cluster is the Kredit Usaha Rakyat (KUR) programme.

Indonesia’s commitment to social protection is also reflected in the tripartite Indonesian Jobs Pact 2011-2014, which was signed on 13 April 2011 (Indonesian Jobs Pact, 2011). The Indonesian Jobs Pact 2011-2014 prioritizes job creation and social protection in response to the recent global economic crisis and supports further socioeconomic development in general.

Social security schemes and programs by branch