01.04.01. Social protection schemes | Indonesia
01.04.01. Social protection schemes | Indonesia
13 Apr 2022
For the past twenty years Indonesia has been working towards social assistance programmes whose endeavours were extended towards that of a national security system through legal implementation in 2004. From there, it took ten years until the implementation of the national health insurance system in 2014. In 2015, a social insurance system for employees was established (TNP2K, 2018, p.i). In the following a brief overview of key social protection schemes will be provided.
One of the earliest social protection schemes developed is ‘Raskin/Rastra’, a rice assistance programme launched during the economic crisis (1998). Since 2017, rastra no longer just provides in-kind rice and eggs, but provides electronic food vouchers (Bantuan Pangan Non Tunai (BPNT)) to the bank accounts of poor families (TNP2K, 2018, p.71).
Another programme, Program Keluarga Harapan (PKH), supports economically vulnerable families with pregnant mothers and children since 2007 through conditional cash transfers. In 2017, the ‘tax-financed social assistance for [older people] […] (Asistensi Social Lanjut Usia (ASLUT)) and the disability scheme’ (Asistensi Sosial Penyandang Disabilitas Berat (ASPDB)) became incorporated into the PKH (TNP2K, 2018, p.73). The programmes provide cash transfers. ASLUT specifically support ‘poor, abandoned and bed-ridden [older] people (from the age of 60 and above)’, while APSDB supports ‘people with severe disability’ (TNP2K, 2018, p.77).
The Government of Indonesia further runs Program Indonesia Pintar (PIP), which financially supports poor students as well as Program Keejahteraan Sosial Anak (PKSA), which aims to support children in difficult circumstances (displaced or abandoned, living with disabilities, juvenile delinquents, children living on the streets) with access to education, health care, and social rehabilitation (TNP2K, 2018, pp.75,78).
There is only a small group of the population, namely, civil servants, who have had access to old age pensions since 1969. Employees in the military, police, and Ministry of Defence are covered through PT Asabri. Employees of all other government institutions and of state-owned companies receive coverage through PT Taspen. Civil servants can access pensions, survivors’ benefits and life endowment insurance (Tunjangan Hari Tua (THT)) through their respective schemes. There is some variation in the amount of pension received; however, most receive approximately ‘70 to 75 per cent of their last monthly earnings’. Civil servants further receive a rice allowance, which continues following retirement (TNP2K, 2018, p.81).
In an effort to widen and develop protection for old age, disability, and unemployment, the Social Security Agency for Employment (Jaminan Ketenagakerjaan (BPJS)) developed four schemes:
- savings for old age, including disability benefit (JHT),
- ‘survivors’ benefit (JKM),
- work injury compensation (JKK) and
- old age pension (JP).
Members of the JHT programme are obliged to withdraw their full contributions once they reach retirement age or can withdraw partial funds before reaching retirement age, if they contributed for more than ten years. Where members experience job loss due to permanent disability, they are entitled for a life-long monthly benefit (depending on their contributions). In 2015, only 249 people received support due to disability-related job loss (TNP2K, 2018, p.79).
Members of the JT programme can receive a monthly pension once they reached retirement age after contributing to the scheme for at least 15 years. Due to the recent establishment of the programme, it is estimated that members are likely to receive reasonable pensions only after 2040 and the number of people benefitting from the programme is small due to low figures of enrolment (TNP2K, 2018, p.79).
The four schemes are accessible to formal sector employees (pekerja penerima upa (PPU)) and informal or self-employed workers (bukan penerima upa (BPU)) (TNP2K, 2018, p.80)
While formal sectors employees have to be enrolled in all programmes, non-wage recipient workers cannot participate in the older people pension programme (JP). In order for non-wage recipient workers to participate the old age saving and disability programme (JHT), they also have to enrol in the ‘survivors’ benefits and work injury compensation scheme (JKM and JKK). The Social Security Agency for employment developed special rates for informal or self-employed workers earning at least IDR 1,000,000 to increase the number of memberships (TNP2K, 2018, p.80). Further, enrolment in JKK and JKM based on government subsidies was proposed for the for the ‘poor and sick’ (TNP2K, 2018, p.80).
Finally, since 2014, Indonesia has a national health insurance programme (Jaminan Kesehatan Nasional (JKN)). This programme brings together all previously separated health insurance schemes under the umbrella of the Social Security Agency for Health (BPJS Kesehatan) (TNP2K, 2018, p.83).
Besides these national schemes, there have also been reports of regional schemes. They include grants for vulnerable children and pension schemes (TNP2K, 2018, p.91):
- The provincial government of Papua started providing financial support (IDR 200,000 per month) for the indigenous children of Papua aged four or younger (Bangun Generasi dan Keluarga Papua Sejahtera (BANGGA Papua)) (TNP2K, 2018, p.91).
- In the Aceh province, all school-aged children have access to Sabang education grants (IDR 2,000,000) to support education-related expenses (Bantuan Pendidikan Kota Sabang)) (TNP2K, 2018, p.91).
- In the Aceh Jaya district members of the community aged 70 or older received IDR 200,000 per month since 2014 (Program ASLURETI). A similar grant was recently introduced in DKI Jakarta (Kartu Lansia Jakarta). This grant supports 14,520 people aged 60 or older with a monthly stipend of IDR 600,000 (Kidd et al., 2018, p.4; TNP2K, 2018, p.91).
Indonesia has several long-standing partnerships with development partners and international donors, working towards developing and improving social protection schemes in the country. Among these partners are WHO, ILO, the World Bank, GIZ, AUSAID, USAID, IDB, ADB, the Global Fund, and UNICEF (Mahendradhata et al., 2017, pp.26-27). These development partners operate in many different sectors. The list below provides an overview of key social protection schemes developed in partnership with international donors.
The World Health Organization (WHO)
The WHO has been involved in the development of social protection schemes in Indonesia for many years. A report from 2018 (Kaasch et al., 2018, p.4), reports that the WHO currently focuses on communicable and non-communicable diseases, the promotion of health across the life course, as well as supporting development of the health system, surveillance, and emergency response. The organisation specifically supports the establishment of UHC through ‘building the capacity of middle management officials in the government, facilitating the monitoring-evaluation and assessment of UHC implementation at different levels, supporting National Health Accounts training and institutionalization and supporting the development of clinical governance and guidelines for improving the quality of the health system’.
The International Labour Organization (ILO)
From 2012 to 2017 ILO activities focused on the “Better Work Indonesia” programme, which focuses on the improvement of ‘working conditions and productivity in targeted employment-intensive sectors’. Furthermore, the organisation was involved in the “Decent Work for Food Security and Sustainable Rural Development” project, which focused on improved working conditions, social protection and the creation of jobs (2014-2016). In addition, the ILO worked on the “Single Window Service” project (Pelayanan Satu Atap), which aimed to support domestic workers, children and widows, and contributed to proposals for the modification of social security programmes (Kaasch et al., 2018, p.5).
The World Bank
The social safety net for the poor working in the informal sector was established in the 1990s as a condition of the structural adjustment programme the World Bank provided. In addition, the World Bank has been working in collaboration with the WHO and UNICEF to improve health and social security in the country (Kaasch et al., 2018, pp.5-6).
Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) GmbH
The GIZ supports Indonesia in extending statutory health cover to population groups that do not yet receive coverage and in developing financial sustainability of the scheme. The organisation also offers advice to the Ministry of Social Affairs on ‘professionalising and expanding the national social assistance programme’ for vulnerable families as well as providing support in rolling out ‘organisational reform, piloting electronic cash transfers and introducing e-learning for social workers’. The inclusion of people with disability and the re-integration of people with occupational injuries into the workforce are other areas of GIZ activity (GIZ, 2017).
The Government of Australia
Australia closely works with the Indonesian government on the ‘National Team for the Acceleration of Poverty Reduction’ (Australian Embassy Indonesia, n.d.; TNP2K, 2018b). The group works on the development and integration of programmes to reduce poverty across ministries and institutions, oversees their implementation, offers technical advice on the implementation of new schemes, and maintains the Unified Database (UDB) (TNP2K, 2018, p.71). The country further provides support to civil society organisations working with marginalised groups on aspects of health, education, and poverty reduction (Australian Embassy Indonesia, n.d.).
The PKH, a programme including conditional cash transfers to poor families as well as social assistance for older people and people with disabilities was reported to have supported ‘150,000 older people and 50,000 people with disabilities’ with IDR 2,000,000,000 per annum (TNP2K, 2018, p.73). Among these, ASLUT supported about 30,000 people aged 60 and over with IDR 200,000 per month, while ASPDB supported 22,500 people with severe disabilities with IDR 300,000 per month in 2016. In 2017, the two programmes reached 150,000 and 50,000 people, respectively (TNP2K, 2018, p.77). While this reflects considerable improvement, Kidd and colleagues remark (2018, p.1) that around 85 per cent of older people in Indonesia remain without income security.
Beneficiaries of the Program Keularga Harapan (conditional cash transfer) increased from 3.5 million to 10 million household between 2017 and 2018. In 2018, households received an annual benefit of IDR 1,890,000. An additional top-up can be received if the family support older people or family members with disability. The programme will be revised in 2019 and base funding on the number of children per household (TNP2K, 2018, p.73).
The food programmes (Rastra/BPNT) supported 15.6 million officially registered beneficiaries in 2018 and amounted to 0.18 per cent of GDP. However, in practice approximately 28.6 million household are likely to have benefitted due to allocation of resources across communities. Despite this considerable coverage, it is estimated that about 45 per cent of the poorest households (15.5 million households) were not included in the scheme in 2017 (TNP2K, 2018, pp.71-72).
In 2016 the civil service pensions PT Taspen and PT Asabri benefited 2.2 million and 48,407 members, respectively. By 2017, 4.2 million active civil servants in PT Taspen supported 2.5 million pensioners (TNP2K, 2018, p.82). Despite coverage of certain groups, it is estimated that an estimated 13 per cent of older people in Indonesia receive a pension, leaving 87 per cent without access to social protection.
Furthermore, the old age pension (JP), due to its recent establishment (2014) will only be able to support pensioners minimally from about 2033. While this can provide protection for future older generations it leaves current older people unprotected. In recognition of the vulnerability of its older population, Indonesia provides health care to approximately 85 per cent of this group (TNP2K, 2018, pp.86-90).
The report also found high vulnerability of people with disabilities of working age. It is estimated that over 90 per cent of this group does not have access to direct financial support. Despite this high number of people without financial support, some progress has been made. In 2017, 112,490 people with disability or work injuries received benefits through the Social Security Agency for Employment and 47,100 people with disabilities received an additional, yet small benefit through the PKH (TNP2K, 2018, p.88).
Australian Embassy Indonesia. (n.d.). Development partnership with Indonesia. Retrieved May 13, 2019, from https://indonesia.embassy.gov.au/jakt/cooperation.html
GIZ. (2017). Social Protection (SPP). https://www.giz.de/en/worldwide/16688.html
Kaasch, A., Sumarto, M., & Wilmsen, B. (2018). Indonesian social policy development in a context of global social governance UNRISD (No. 2018–6; UNRISD Working Paper). https://www.econstor.eu/bitstream/10419/186116/1/1024298469.pdf
Kidd, S., Gelders, B., Rahayu, S.K., Larasati, D., Huda, K. & Siyaranamual, M. (2018) Implementing Social Protection for the Elderly in Indonesia, Jakarta Pusat: Sekretariat Tim Nasional Percepatan Penanggulangan Kemiskinan. http://www.tnp2k.go.id/filemanager/files/Perlindungan%20Sosial%20Lansia/Elderly%20Brief%20-%20English%20Version.pdf
Mahendradhata, Y., Trisnantoro, L., Listyadewi, S., Soewondo, P., MArthias, T., Harimurti, P., & Prawira, J. (2017). The Republic of Indonesia Health System Review (Vol. 7, Issue 1). https://apps.who.int/iris/bitstream/handle/10665/254716/9789290225164-eng.pdf
Tim Nasional Percepatan Penanggulangan Kemiskinan (TNP2K). (2018) The Future of the social protection system in Indonesia, Jakarta Pusat: Office of the Vice President of the Republic of Indonesia. https://www.developmentpathways.co.uk/wp-content/uploads/2018/11/44293181123-SP-ReportFinal-ENG-web.pdf
TNP2K. (2018b). The future of the social protection system in indonesia: social protection for all (pp. 1–15). http://tnp2k.go.id/download/24864181129 SP Exe Summary ENG-web.pdf