Social Protection Assessment Based National Dialogue in Indonesia: - - PowerPoint PPT Presentation

Social Protection Assessment Based National Dialogue in Indonesia: Existing schemes, gaps, recommendations and scenarios

Jakarta, 13 December 2011 Sinta Satriana

“Official” Coverage

< 1% of informal economy covered by Jamsostek pilot program Jamkesmas and Jamkesda: 100% poor & near poor covered

Informal economy Near poor & Poor Civil serv Private sector

100% of civil servants / police / military & families

One third One third

Jamsostek: 18% of private sector employees

Health

Formal Economy two third

50% of the poor through Jamkesmas & additional % through Jamkesda Jamkesmas & Jamkesda, 100% of the civil servants / police / military & families through Askes 18% of private sector employees covered

Real coverage

Jamsostek for informal Economy

Near poor & Poor Civil serv Private sector One third One third Formal Economy

Health

Informal economy two third

Coverage mandated by Law 40/2004: 100%

Non-poor informal economy Near poor, Poor, disabled, unemployed

Health

Formal Economy

Contribution paid by the government Contribution paid by workers, in nominal amount Contribution paid by workers&employers, in % of salary

Health

Main gaps and implementation Issues:

• Non poor informal economy workers and their families not covered
• Low coverage in the private sector, desoite mandatory participation
• Targeting issues lack data on beneficiaries and utilization of Jamkesmas
• Unclear benefit package in Jamkesmas leading to unanticipated out-of-pocket

payments

• Exclusion of diseases such as HIV and cancer

Main Recommendation

• Develop a specific benefit package for the Jamkesmas program and Improve

database system

• Improve linkages with Health Care supply (reception of patients, payment system
• f the hospitals…)
• Increase enforcement of Jamsostek Law in the private sector
• Increase coverage of Informal Economy workers through the design of adapted

enrolment & contribution mechanisms, a mapping of IE workers, the expansion of Jamkesmas to a larger population, the development of regulations to implement Law #40, 2004, etc.

• Extension of Jamkesmas to the uncovered poor due to mis-targeting

(Current Jamkesmas cost assumption)

• Inclusion of HIV treatments and checkups for all active age population
• Introduction of a universal package to reduce Mother to Child HIV Transmission

Non-por Informal Near poor & Poor Civil serv Private sector One third One third One third

Low Scenario:

Costing Exercise

Costs 0.27% of GDP b 2020

• Health care for all informal economy population, higher level of benefits based
• n WHO’s report of the Commission on Macroeconomics and health (USD 49,

2011 price)

• Inclusion of HIV treatments and checkups for all the population
• Introduction of a universal package to reduce Mother to Child HIV

Transmission

High Scenario:

Costing Exercise

Costs 0.76% of GDP by 2020

Informal economy Near poor & Poor Private sector One third One third Formal Economy two third Civil serv

Universal coverage

• f BOS

Small child allowances for civil servants

The “official” coverage

4.1 million very poor students receive scholarships Raskin 17% of the poor HH covered by PKH PKSA

Children

Informal economy Near poor & Poor Private sector One third One third Formal Economy two third Civil serv

Universal coverage

• f BOS

Informal economy Near poor & Poor Civil serv Private sector

Low family allowances for civil servants scholarships Raskin 17% of the poor HH covered by PKH PKSA

Raskin and Scholarships have targeting errors

The “real” coverage

Children

Children

Gaps and Implementation Issues:

• Limited coverage area of the PKH program
• Insufficient supply of health and education services to ensure fulfillment of the

PKH conditionalities

• Lack of reliable data and efficient targeting mechanisms
• Despite BOS allocation, schools still apply extra fees in practice
• Unclear targeting mechanism of the Scholarship for the poor program

Main recommendation

• Extend the coverage of the PKH and scholarship programs, and calculate the

corresponding costs

• Explore the possibility of introducing a universal child allowance, and calculate the

corresponding cost

• Increase availability of Schools and Health care services in remote areas
• Develop more linkages between access to health, nutrition and education
• Improve targeting and data collection under all programs
• Reduce administrative costs of Raskin
• Explore the merger of PKH and Scholarship program to avoid duplication

Universal coverage

• f BOS

Informal economy Near poor & Poor Civil serv Private sector

Low family allowances for civil servants scholarships Raskin PKH PKSA

Children

Extension of the PKH program to all poor households (and not only the very poor households)

Low Scenario

Will cost 0.05% of GDP by 2020

Informal economy Near poor & Poor Civil serv Private sector One third One third One third Universal child allowance (400,000 IDR/year, 2011 price)

Children

High Scenario

Universal child allowance Will cost 0.2% of GDP by 2020

If the legislation was enforced the total private sector would be covered

Jamsostek pilot program for informal (injury & death): <1% Scattered interventions (Asekesos, PNPM, KUR, BLK, …) 100% of the civil servants / police / military 33% of private sector covered in work injury, sickness& death

Current coverage

Working Age

Informal economy Near poor & Poor Private sector One third One third Formal Economy two third Civil serv

Coverage mandated by Law 40/2004: 100%

Informal economy

Working age

Formal Economy

Contribution paid by workers, in nominal amount Contribution paid by workers & employers, in % of salary

Working Age

Main Gaps and Implementation Issues

• Almost no income security measures for informal economy workers and

extension of the Jamsostek pilot scheme is very slow

• Limited coverage of formal sector workers due to high evasion
• Severance pay provides insufficient protection compared to

unemployment insurance

• Lack of harmonization of the maternity benefits for formal employees
• Low coverage and low level of protection under the Askesos program
• The provision of income security benefits is rarely linked with measures to

increase employability, facilitate job creation or return to employment

Working Age

Main Recommendation:

• Improve enforcement of the Labor Law to reduce evasion (explore the

TWIN system)

• Feasibility study of an unemployment insurance scheme
• Develop linkages between Public Employment Programs and skills

development

• Explore the possible introduction and calculate the cost of a maternity

benefit for women in the informal economy

• Design and pilot test a Single Window Service mechanism for workers in

the informal economy that would :

• Facilitate their registration and access to social protection and

employment services

• Assess their vulnerability and skills needs
• Ensure proper monitoring and evaluation of existing programs
• Enhance coordination between institutions and interventions

Establishment of a public works program linked with vocational training (30 days of work, minimum wage, vocational training)

Minimum income security through integrated PWP & skills development

Scenario

Working Age

Would cost 0.35% of GDP by 2020

Informal economy Near poor & Poor Private sector One third One third Formal Economy two third Civil serv

< 1% of informal economy covered by Jamsostek pilot program

Informal economy Near poor & Poor Civil serv Private sector

100% of the civil servants / police / military: Pension and savings

One third One third One third

33% of private sector employees, Jamsostek saving

Old age and disability protection coverage

Nursing home subsidy Allowance for elderly with no family support (1%

• f estimated need)

Severe disability allowance

Old age savings, contribution in nominal amount

Law 40/2004: Old age saving for all workers and periodical pension for formal workers

Old age and disability

Informal economy One third One third Formal Economy two third

Pension and old age savings, contributions in % of salary

Elderly and Disabled

Main Gaps and Implementation Issues

• Almost no income security provisions for the elderly in the informal

economy

• High evasion in the private formal sector
• Old age lump sums do not provide adequate protection
• The sustainability of the unfunded defined-benefit scheme for civil

servants is questioned

• The coverage of the non-contributory minimum pension program is

limited

• Lack of harmonized definition of disabled people (across Ministries, BPS,

etc.)

• Lack of comprehensive and comparable database with a clear

classification of the disabled people

Recommendations

• Conduct a Feasibility study of a defined benefit pension scheme for

formal sector workers

• Explore the possible extension and calculate the cost of a non-

contributory minimum pension scheme for the elderly and people with permanent disabilities

• Create a comprehensive database of disabled people and elderly,

to facilitate targeting

• Increase the budget allocation to nursing and other charitable

homes

Elderly and Disabled

• Extension of existing non-contributory pension scheme for all severely

disabled persons and all vulnerable elderly (i.e. without family support) Informal economy Near poor & Poor Civil serv Private sector One third One third One third

Low Scenario:

Allowance for elderly with no family support Severe disability allowance would cost 0.09% of GDP by 2020

Universal pension at the level of poverty line Non-poor Informal Near poor & Poor Civil serv Private sector One third One third One third

High scenario

Would cost 0.95% of GDP by 2020

Thank you

Sinta Satriana sintasatriana@yahoo.com