266 5.5 Social Security Organisation (SOCSO)


By the end of this sub unit, you should be able to:

1. Explain what SOCSO is.

2. Describe the different rates, types and categories of contribution of SOCSO.

3. Discuss the coverage provided by SOCSO.

4. Describe the benefits of contribution to SOCSO by a corporation which has no insurance coverage and the benefits to employees.


Human capital is heartbeat of any businesses. Safety of employees in course of work and performing tasks is an obligation of an employer. However, in a capitalist system; these two areas of responsibility may be ignored. Thus, the Parliament has to step in to safeguard the interest and welfare of employees who are injured in course of work. The government agency prior to 1 January 1992 entrusted with the responsibility is SOCSO, the Social Security Organisation.

SOCSO administered the Employees Social Security Act 1969 (ESSA) and the Employees Social Security (General) Regulations 1971. In July 1985, SOCSO, became a statutory body, and with effect from 1 January 1992; SOCSO or PERKESO (in Bahasa Malaysia) has administered its own compensation scheme under a Sistem Saraan Baru PERKESO (SSBP) or New Social Security Protection Scheme. However, its still has powers as a regulatory body under the ESSA. It is a statutory body that reports to Ministry of Human Resources.

SOCSO under its own compensation scheme, provides social security protection by issuing social security insurance to employees in relation to occupational accident including those who sustained injury or death, met with accident in course of work, or contracted disease due to service.

Although there is the Occupational Safety and Health Act 1994 to secure the safety, health and welfare among all Malaysian workforce and to protect others against risks to safety or health in connection with the activities of persons at work, the failure to do so by employers should not prejudice workforce from compensation especially if the workforce have no insurance coverage either by themselves or by the employer. SOCSO, thus, is a remedial body to support the families of the workers or liability of employer who may have to compensate the workers in event of a civil suit.

SOCSO only covers Malaysian workers and permanent residents. Foreign workers are covered by the Workmen’s Compensation Act 1952.


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