Social Protection Assessment Based National Dialogue in Indonesia: Existing schemes, gaps, recommendations and scenarios Jakarta, 13 December 2011 Sinta Satriana
Health “Official” Coverage Jamsostek: 18% of private sector employees 100% of civil < 1% of informal servants / police / economy covered by military & families Jamkesmas and Jamkesda: Jamsostek pilot program 100% poor & near poor covered Near poor & Poor Private sector Civil serv Formal Economy One third Informal economy One third two third
Health Real coverage 18% of private sector employees Jamsostek for covered informal 100% of the civil Economy servants / police / Jamkesmas & military & families 50% of the poor through Jamkesda, through Askes Jamkesmas & additional % through Jamkesda Near poor & Poor Private sector Civil serv Formal Economy One third Informal economy One third two third
Health Coverage mandated by Law 40/2004: 100% Contribution paid by Contribution paid by the Contribution paid by workers, in nominal government workers&employers, in amount % of salary Near poor, Poor, Non-poor informal Formal Economy disabled, unemployed economy
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 of 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.
Costing Exercise Low Scenario: • 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 Costs 0.27% of GDP b 2020 Near poor & Poor Non-por Informal Private sector Civil serv One third One third One third
Costing Exercise High Scenario: • Health care for all informal economy population, higher level of benefits based on 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 Costs 0.76% of GDP by 2020 Near poor & Poor Private sector Civil serv Formal Economy One third Informal economy One third two third
Children The “official” coverage 4.1 million very poor students receive scholarships 17% of the poor HH covered by Small child PKSA allowances for PKH civil servants Universal coverage of BOS Raskin Near poor & Poor Private sector Civil serv Formal Economy One third Informal economy One third two third
Children The “real” coverage Raskin and Scholarships have targeting errors scholarships 17% of the poor Low family HH covered by allowances for PKSA PKH civil servants Universal coverage of BOS Raskin Near poor & Poor Informal economy Private sector Civil serv
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
Children Low Scenario Extension of the PKH program to all poor households (and not only the very poor households) Will cost 0.05% of GDP by 2020 scholarships Low family allowances for PKSA civil servants PKH Universal coverage of BOS Raskin Near poor & Poor Informal economy Private sector Civil serv
Children High Scenario Universal child allowance (400,000 IDR/year, 2011 price) Will cost 0.2% of GDP by 2020 Universal child allowance Near poor & Poor Informal economy Private sector Civil serv One third One third One third
Working Age Current coverage If the legislation was enforced the total private sector would be covered 33% of private sector covered in work injury, sickness& death Jamsostek pilot 100% of the civil program for informal servants / police (injury & death): / military Scattered interventions <1% (Asekesos, PNPM, KUR, BLK, …) Private sector Near poor & Poor Civil serv Formal Economy One third Informal economy One third two third
Working age Coverage mandated by Law 40/2004: 100% Contribution paid by Contribution paid by workers, in nominal workers & employers, amount in % of salary Informal economy Formal Economy
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
Working Age Scenario Establishment of a public works program linked with vocational training (30 days of work, minimum wage, vocational training) Would cost 0.35% of GDP by 2020 Minimum income security through integrated PWP & skills development Private sector Near poor & Poor Civil serv Formal Economy One third Informal economy One third two third
Old age and disability protection coverage Allowance for elderly with no family support (1% 33% of private of estimated need) sector employees, Jamsostek saving Severe 100% of the civil < 1% of informal disability servants / police / economy covered by allowance military: Pension Nursing home Jamsostek pilot program and savings subsidy Near poor & Poor Informal economy Private sector Civil serv One third One third One third
Old age and disability Law 40/2004: Old age saving for all workers and periodical pension for formal workers Pension and old age Old age savings, savings, contributions in contribution in nominal % of salary amount Formal Economy One third Informal economy One third two third
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
Elderly and Disabled 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
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