Providing medical care is a core contingency for which social security programs are designed.

Social security can be looked at from two points of view. In a narrow and popular sense, it may be perceived by workers as a means of obtaining some contingency payments, as a series of benefits which include medical care, sickness benefits, maternity benefits, employment injury benefits, old-age benefits, invalidity benefits, survivors’ benefits, unemployment benefits, and family benefits. In some cases, welfare benefits such as vocational rehabilitation for disabled persons, convalescents, or even vocational training or retraining for unemployed workers, and recreational facilities are also included among social security benefits. Thus, the contingencies normally dealt with by social security systems include:

(i) the need for medical care;

(ii) suspension, loss or substantial reduction of income due to

(a) sickness;

(b) maternity;

(c) occupational injury, covering both accidents and occupational diseases;

(d) old age;

(e) invalidity;

(f) death of the breadwinner;

(g) unemployment; and

(iii) responsibility for maintaining children.

In a broader sense, social security represents more than just a contingency relief: it is a comprehensive concept focused on the achievement of the goal of workers’ welfare in general. Its purpose is to provide the means for improving workers’ economic and social well-being. There is therefore a need to look at social security policies and programmes which can provide the means for guaranteeing opportunities for employment, health benefits, the education of workers and their children, home ownership, and insurance for workers and their dependants.

Today, the term “social security” refers to the protection offered by society to its members through a series of public measures against economic or social distress that is caused by the absence of earnings or substantial reduction or stoppage of earnings resulting from sickness, maternity, employment injury (including occupational diseases), unemployment (including absence of employment) and underemployment, invalidity, destitution, disability, retarded development, old age, and death; and further, to provide for health care including preventive measures.

Types of social security

Social security systems in Asean nations can be classified into two types: voluntary schemes and compulsory schemes. These schemes can also be categorized as follows:

(a) traditional systems;

(b) provisions in employment contracts of service and in collective agreements;

(c) statutory.

Community response: a safety net

The traditional social security systems are voluntary in nature and are governed by local cultural practices which ensure that assistance is provided to families and individuals in times of need. Collective action in the community for the purpose of mobilizing resources to provide benefits for families include occasions such as funerals, assistance for widows, orphans, and the destitute. The rules governing the conduct of the affairs of these types of programmes are informal in nature but are sanctioned through convention in the community. This type of social security is important in the rural as well as the urban poor communities who are mainly workers in the informal sector of the labour market. Although the community response to such needs occurs on an ad hoc basis, it is important to note that the community initiatives to maintain these types of self-help programmes empower the communities to play a proactive and positive role in maintaining a social security safety net for the poor in the unorganized sector of the labour market, both in the rural and urban areas.

Statutory provisions or negotiated terms

In the formal labour market, where employment is governed by contracts of service and where trade unions play a role in determining the terms and conditions of employment through collective bargaining with employers, provisions are in place in contracts of service and in collective agreements which address the issues of social security, contingency payments, medical benefits, retirement benefits, training and education, and death benefits. While the provisions in these agreements recognize the minimum standards laid down in the statutes, the actual terms and conditions with regard to the payment of social security benefits are usually negotiated above the minimum statutory standards. These negotiated terms and conditions represent therefore an important complement to the statutory social security benefits provided for workers. However, the number of workers who benefit from them are limited to those in the formal sector of the labour market and specifically to those whose terms and conditions of employment are governed by a contract of service on a personal to holder basis or by collective agreements.

Cooperatives: a major vehicle

One other institution which provides social security benefits to its members is the cooperative society. This type of society focuses on benefits to its members which include medical benefits, retirement benefits, housing, and group insurance. This type belongs to the category of the voluntary social security services available in society. However, its role is limited to the membership in the cooperatives. These institutions are also useful links for participation in national social security programmes: for instance, farmers’ cooperatives facilitate the participation of individual farmers in national social security schemes organized by the government. In Malaysia, for example, the cooperative movement is being studied for the potential it offers to serve as an important channel for integrating farmers, fishermen, and selfemployed workers into the social security schemes provided for under the Social Security Act. This approach will undoubtedly add significantly to the number of workers who enjoy social security benefits in the country.

As for compulsory social security schemes, they are enforced through legislation. This ensures that all workers and employers must comply with legislation, both by contributing to and benefiting from the schemes. All Asean nations have set up statutory social security schemes through appropriate legislation. However, such legislation only covers the formal sector of the labour market. The millions of workers in the peasant, agricultural, forestry, fishing, and in the informal sector of the urban labour market are not adequately covered by the legislation in place.

The planning, implementation, administration, and evaluation of the social security schemes functioning in Asean countries have evolved in proportion to each nation’s economic and social circumstances. Given the varied degrees of prosperity prevailing in these nations, the various schemes launched have gradually been improving in terms of the coverage of workers, types, and quantum of benefits. Social security benefits also vary depending on whether employees are in the private or public sector. The schemes usually developed cover the following areas:

(a) old age, disability, and survival;

(b) sickness and maternity;

(c) employment injury; and

(d) family allowances.

Old age, disability, and survival benefits

Old age, disability and death benefits are covered either through provident fund schemes or through the social insurance system. In countries such as Indonesia and Singapore, the provident fund system is used. In Indonesia, legislation ensures that establishments with ten or more employees or a payroll of 1 million rupiahs or more a month are covered under the provident fund scheme. Coverage is gradually being extended to smaller establishments and to casual and seasonal workers. Civilian public employees and military personnel are covered under special systems designed for them. Provident fund contributions are collected from the employee at the rate of 2 per cent of earnings while the employer contributes 4 per cent of the payroll. Old age benefits, which take the form of a lump sum payment equal to total employee and employer contributions paid plus accrued interest can be collected at the age of 55. Disability and survivor benefits are paid to people for total incapacity for work under the age of 55 or in the case of death. Disability benefits amount to a lump sum equal to total employee and employer contributions paid plus accrued interest. Survivor benefits include a similar payment and in addition they receive a death benefit of 1.2 million rupiahs.

In Singapore, the provident fund system coverage is extended to employees earning more than S$50 (Singaporean dollars) per month. This coverage is also extended to selfemployed workers. Public sector employees are excluded from this scheme since a special pension system is implemented for them. Employees contribute 20 per cent of their wages in the category earning wages over S$200 per month. Employers contribute 20 per cent of monthly earnings to the fund for workers earning S$50 and above. The Government’s objective is to create a long-term central provident fund rate for both employees and employers. Lower contribution rates are applied to persons above the age of 55. Old-age benefit is collected as a lump sum equal to total employee and employer contributions plus at least 2.5 per cent compound interest, less the amount set aside for medical contingencies and S$40,000 to ensure continued income from the age of 60. Disability benefits are paid as a lump sum similar to old-age benefits, while survivor benefits are paid to nominated survivors or legal heirs, but a smaller amount is allocated to medical contingencies.

In Malaysia, the national provident fund covers all workers. However, teachers, members of the armed forces, and other employees who have private provident fund arrangements are excluded. The national scheme is also extended on a voluntary basis to domestic workers and self-employed. Provident fund contributions are constituted by 10 per cent of employees’ earnings and 12 per cent of employers’ payroll. The provident fund pays a lump sum at the age of 55 or at any age if a worker is emigrating permanently. Workers can also withdraw up to 30 per cent of their accumulated fund at the age of 50 before retirement. Survivor benefit amounting to total employer and employee contributions plus accumulated interest in the provident fund is paid to the legal beneficiary of the fund. Permanent disability entitles a contributor to withdraw his or her total amount due as accumulated credited in the provident fund. In Malaysia, disability benefits are also covered under a social insurance system which provides temporary, permanent, and survivor benefits to the insured worker. Contributions for these purposes are shared as follows: workers contribute approximately 0.5 per cent of earnings and employers 0.5 per cent of the payroll. Permanent disability benefits under the social insurance scheme provide a maximum pension of 65 per cent of workers’ earnings.

Viet Nam, Philippines, Thailand

Myanmar has a special pension system for public employees only. Survivor benefits include the funeral grant of 1,000 kyats which is paid under the sickness insurance. In Viet Nam, the Philippines, and Thailand, old age, disability, and death benefits are managed through a social insurance system. In Viet Nam, employees contribute 5 per cent of wages while employers contribute 10 per cent of the payroll; in Thailand, the worker contributes 1.5 per cent of wages, employers contribute 1.5 per cent of the payroll, and the Government contributes an annual grant equal to 1.5 per cent of covered wages. In the Philippines, workers contribute 3.3 per cent of earnings, self-employed workers 8 per cent, and employers 4.67 per cent of the payroll.

The coverage in the Philippines includes seafarers aboard foreign vessels, self-employed workers, farmers, fishermen, and domestic servants. Family labour is excluded. Special systems are in place for government employees. Old-age benefits in the Philippines are provided in the form of a pension, the floor set at 1,200 pesos a month or 40 per cent of average monthly credited earnings. Permanent disability benefits and survivor benefits are also provided for in the Philippines. The benefit levels for permanent disability and survival benefits are similar to the old-age pension plan.

In Viet Nam, the old-age pension reaches a ceiling of 75 per cent of average wage in the last ten years before retirement and rates for permanent disability and survival benefits are also stipulated. Provisions are also in place for a survivor grant of a lump sum of a maximum of up to 12 months’ wages of a recipient and a funeral grant of a lump sum equal to seven months of the minimum wage applied in state employment.

Sickness and maternity benefits

Sickness and maternity programmes are covered through the social insurance system in Myanmar, Indonesia, Viet Nam, and the Philippines. In the Philippines, workers contribute 1.2 per cent of their earnings, while employers contribute 1.2 percent of the payroll for medical b e n e fits. Employers also contribute 0.4 per cent of the payroll for maternity benefits. In Viet Nam, sickness and maternity benefits are funded by the employer at the rate of 5 per cent of the payroll. In Indonesia, employers contribute 6 per cent of the payroll for married employees and 3 per cent for single employees. All three countries provide for cash benefits and medical treatment. In Indonesia, medical benefits are also extended to the dependants of workers covered by the social insurance system. In Malaysia, sickness and maternity programmes are covered as an employer liability p rogramme enforced through provisions in the Employment Act and provisions of collective a g reements where applicable. Employers in turn seek private sector insurance policies for medical benefits for their employees. The employees’ provident fund also provides benefits to contributors for critical illness. In Singap o re, sickness and maternity are funded fro m the Medisave account in the Central Pro v i d e n t Fund. Both workers and employers contribute to this account 3 per cent of the 20 per cent contributions each makes to the Central Pro v i d e n t Fund. Maternity benefit is covered under the Employment Act which provides for paid leave of up to four weeks before and four weeks after c o n finement provided that the worker was employed at least 180 days during the pre c e ding year. Maternity benefit in Singapore is limited to the first two children. Medical benefit s a re also extended to dependants. All A s e a n nations recognize the importance of maternity leave and provide for paid leave and leave of between 90 to 120 days in special circ u m s t a n c e s and up to 180 days as in the case of Viet Nam.

However, government health care services take pride of place in all Asean nations. Although social security programmes cover the health service requirements of those who participate in them, the majority of the population relies on government health care services, particularly in the rural areas. This system is highly subsidized by the government and is accessible to all.