#Working Wisdom #Human Resources #Employer

The Complete Guide to SOCSO

by Mohamad Danial bin Ab. Khalil

Oct 15, 2020 at 7:01 AM

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What is SOCSO?

SOCSO (Social Security Organisation), otherwise known as PERKESO (Pertubuhan Keselamatan Sosial), was founded in 1971 under the Ministry of Human Resources to provide social security protections to all employees or workers in Malaysia.

Socso has several functions, including:

Registration of employers and employees
Collection of contribution from employers and employees
Payment of benefits to employees and/or their dependents when an accident happens
Provision of physical and vocational rehabilitation benefits
promotion of awareness of occupational safety and health

How to register with SOCSO

The employer and its employees must be registered with SOCSO not later than 30 days on which the Act becomes applicable to the industry. For registration, an employer is required to complete the Employer's Registration Form (Form 1), Employee's Registration Form (Form 2), together with relevant documents specified.

The employer or the employer's representative can register at the SOCSO counters. If an employer were to send a representative in their place for the registration, an authorization letter from the employer is needed or not considered valid.

SOCSOhas also prepared a form for the registration of foreign workers.

SOCSO shall be notified of any changes to the name, address, type of proprietorship, status of the employer, or employees.

All of the forms are available here.

person filling a form
Form 1 is for employers, while Form 2 is for employees.

Payments to SOCSO

Employers must make their SOCSO payments to the SOCSO offices no later than the last day of the following month.

Employers handle SOCSO payments, and there are three main ways to make their contributions and payments every month. Here are the payment methods:

Banks: Employers will need to use the pre-printed SOCSO Contribution Form or Borang Caruman Bulanan/Borang 8A. These are the banks that accept SOCSO payment transactions:
- Maybank
- CIMB Bank Berhad
- Public Bank Berhad
- Bank Muamalat
- Pejabat Pos Malaysia (applicable for Sabah & Sarawak employers only)
Internet Banking: Employers can also make monthly SOCSO payment contributions through the internet banking method. Employers will need to be registered with the banks listed here. Employers would need to open an account with any of the banks listed above and register this SOCSO payment service by contacting the branch where the bank account was opened. Employers will then have to submit a completed application form and the employee's name and the SOCSO contribution data required.
SOCSO's Offices – If an employer wishes to make payments directly as SOCSO's offices itself, SOCSO only accepts payments in the form of cheques or postal money order.

person using laptop
It's now easier to make payments to Socso via online banking.

SOCSO Contributions

The maximum eligible monthly salary for SOCSO contribution is capped at RM4,000. Socso has provided a comprehensive Contribution Rate table for employer's and employee's contributions.

Who is eligible?

1. Malaysian / Permanent Resident (under 60 years old)

Employee: 1.75%
Employer: 0.5%

2. Malaysian / Permanent Resident (above 60 years old) and Foreign Employees

Employee: 0%
Employer: 1.25%

EIS contribution rate

The contribution rate for Employment Insurance System (EIS) is 0.2% for the employer and 0.2% for the employee, based on the employee's monthly salary. The contribution rate differs according to monthly wages. You can refer to the EIS Contribution Table.

EIS is not under the SOCSOcategory and will be deducted separately.

work injury claim form
Socso protects employees against accidents too.

The Benefits of SOCSO

SOCSO provides several schemes that are meant to protect its members:

Employment Injury Scheme

The Employment Injury Scheme protects an employee against accident and occupational disease during the employment period.

Here are the benefits:

Invalidity Scheme

The Invalidity Scheme provides 24-hour coverage to an employee suffering from invalidity or death due to any cause. Even if the cause of invalidity and/or death is not related to work, this scheme will cover the employee.

The benefits the employee is entitled to:

Employment Insurance System (EIS)

If an employee has contributed to EIS and loses their job, they will get some benefits to help them cope. The benefits they are entitled to are:

Job search allowance
Reduced Income Allowance
Training Fee
Training Allowance
Early Re-Employment Allowance
Re-Employment Placement Program
Career Counseling

insurance agent working on report form
Make sure the employee has all the documents before submitting a claim.

How to Submit SOCSOClaim

1. For first-timer applying for medical benefits, here are the required documents:

Accident report Form 21 / occupational disease report Form PKS 68/PKS 69
Work attendance record
Claims form (Form 10)
Medical leave certificate
Employer's identification letter
A photocopy of the employee's identity card
The police report and a sketch map of the journey (for accidents happen while traveling to or from the workplace)

Treatments are entirely free of charge at SOCSO panel clinics/government hospitals and clinics once the application is finished.

2. There are additional documents needed to receive reimbursement for non-SOCSO panel treatments. The forms must be submitted to the employee's local SOCSO office, and SOCSO will determine the reimbursement rate. Here are the extra documents:

Form PKS (P) 24 - Reimbursement Travel Claims Form
Form PKS (P) 26- Reimbursement Payment Claim Report (general)
Original receipt of treatment
A photocopy of the appointment card
A photocopy of the medical report, if any

3. Once a doctor certifies an employee is unfit to work for at least four days (including the day of workplace accident), they will be eligible for temporary disablement benefit. The employee will receive financial support during the period when they are away from work.

4. When employees sustain permanent disabilities due to workplace accidents, they can claim permanent disablement benefits regardless of their ability to work. The employee must make a written application at the SOCSO office with the medical board's reference. These are the documents needed:

Medical report from the medical facility where the employee was treated
Application form
A photocopy of the employee's identity card
Form PKS (F) 1 as well as SOCSO contribution details & salary statement
Claim form (Form 10)
Employee's account statement for direct deposit of benefits

The benefit rate is 90% of their daily wages, ranging from a minimum of RM10 to RM88.50 per day.

Employees can choose to work while receiving permanent disability benefits. The Medical Board will decide on how the benefits are paid. If employees are not satisfied with the arrangement, they can file an appeal to the Medical Appeal Board within 90 days, beginning from the date of notification.

5. Employees are entitled to receive constant attendance allowance if they have lost 100% of their ability to work and earn due to workplace accidents. The Medical Board in Malaysia certifies employees who have a temporary disability or suffer total permanent disability. They will receive the allowance (40% of the total salary, with a cap of RM500/month) directly.

SOCSO for Foreign Workers

Beginning on 1 January 2019, employers who hire foreign workers (not including domestic servants) shall register their employees with SOCSO and contribute to the Employment Injury under the Employee's Social Security Act 1969 (Act 4).

The contribution rate is 1.25% of the Insured monthly wages and to be paid by the employer. The Contribution Rate table can be found here.

Registration of foreign workers can be made online via the ASSIST portal by completing the Foreign Worker Registration Form and submit it to the nearest Socso office.

Eligibility requirements

Must have valid passport and Special Pass for new foreign workers; or
Must have valid passport and Temporary Employment Visit Pass or a valid employment pass for existing foreign workers, whichever applicable.

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Sources: Loanstreet, Socso, 3E Accounting, Talenox, iMoney