What happens if you’re the breadwinner and you fall into an unfortunate accident, which cuts off your income source? 

Don’t worry, Malaysia has a social security system to ensure your financial security, that you will still have a source of income if you’re physically unable to work! 

According to the International Labour Organisation, the minimum standard of Social Security is the provision of protection of life standards against risks and social needs to ensure financial security in order to prevent and reduce poverty and inequality. It is also a form of social inclusion and human dignity. 

According to the Department of Occupational Safety and Health (under the Ministry of Resources): 

From January to November 2022 there were 6,306 cases of Occupational Accidents of Non-Permanent Disability, with Accidents of Permanent Disability totalling 227, and 186 deaths in the workplace. 

A total of 6,719 employees and their families are affected. 

In the event that the employee, due to illness, disability or death is unable to provide a source of income, insurance coverage for all workers ensures financial security for their families and dependents. 

One of Malaysia’s Social Security Networks is provided by Social Security Organisation (SOCSO) or Pertubuhan Keselamatan Sosial (PERKESO) in Malay, a Malaysian Government Agency under the banner of the Ministry of Human Resources. 

PERKESO provides social security protection under the Employees’ Social Security Act 1969 and the Employees’ Social Security (General) Regulations 1971 through: 

  1. Employment Injury Scheme 
  2. Invalidity Scheme
  3. Employment Insurance System (EIS) 

Who is eligible? 

Domestic workers and registered foreign workers are eligible to contribute and benefit from PERKESO employee schemes.

A domestic worker is either: A Malaysian Citizen, a Permanent Resident, or Temporary Resident.  

A foreign worker is: A passport-holding worker originating outside Malaysia and possessing a valid Employment Pass. 

Foreign workers are only eligible for the Employment Injury Scheme.

Registration and coverage by PERKESO are compulsory for all private sector employees and public servants.  

Self-Employed workers are not eligible for coverage. They have a separate Self-Employment Social Security Scheme. 

Internships for Employers are not eligible for coverage.

Employment Injury (EII) Scheme 

EII protects workers’ financial security in the case of a workplace-related accident or occupational disease, rendering them temporarily unable to work. 

A few benefits include: 

  • free medical treatment at SOCSO’s panel clinic or Government clinic/hospital until full recovery. 
  • Temporary Disablement Benefit of up to 80% of the employee’s average assumed daily wage, with a minimum of RM30.00 per day to a maximum of RM105.33 per day.
  • Permanent Disability Benefit of 90% of the employee’s average assumed daily wage, with a minimum of RM30.00 per day to a maximum of RM118.50 per day.
  • Physical or Vocational Rehabilitation fully paid by EII. 

Invalidity Scheme 

The invalidity Scheme covers employees suffering from invalidity or death from any cause, and is unrelated to employment. 

Invalidity is defined by PERKESO as “suffering from a specific morbid condition of permanent nature either incurable or is not likely to be cured and no longer capable of earning, by work corresponding to his strength and physical ability, at least 1/3 of the customary earnings of a sound Insured Person.” 

To qualify, the employee must: 

  • Be less than 60 years of age on the date of the invalidity notice being submitted. 
  • If the employee’s age has reached 60, they must demonstrate proof of invalidity occurring before 60 and have not engaged in an occupation after the invalidity. 
  • Be certified as experiencing the invalidity by the Medical Board or the Appellate Medical Board. 

Benefits include 50% to 65% of the average assumed monthly wage subject to a minimum pension of RM475 per month.

The benefits are payable as long as the employee is invalid or until their death.

The Invalidity Pension is Replaced by a Survivors’ Pension, entitled to their dependants if the Invalidity Pension recipient dies, regardless of his / her age. The benefits are identical.

Employment Insurance System (EIS) 

Loss of employment refers to insured persons losing their employment and does not include voluntary resignation and retrenchment due to misconduct.  

Insured Persons are eligible to receive benefits if they:

  1. Apply within 60 days from the date of loss of employment (LOE).
  2. Satisfy the Contributions Qualifying Conditions (CQC) i.e. have paid monthly contributions for a minimum number of months.
  3. Experience loss of employment (LOE) as defined in the EIS Act.

Benefits provided: 

  1. Job Search Allowance (JSA) – Replacement income for those who have lost their sole source of income, with a duration of 3-6 months. The amount and duration depend on the Contributions Qualifying Conditions.
  2. Early Re-employment Allowance – Incentive to encourage recipients to return to work while still under JSA. The amount is worth 25% of the JSA the recipient is eligible for but has not yet been paid.
  3. Reduced Income Allowance (RIA) – Replacement income for those who have multiple sources of income and have lost one or more, but not all sources of income. Payment and duration are identical to JSA, with similar Contributions Qualifying Conditions. 

If all income sources are lost, then the recipient is eligible for both JSA and RIA.

Contributions Qualifying Conditions 

Contributions to these schemes are made by both the employee and employer. 

Employers are required to pay monthly contributions for each eligible employee according to the rates specified. Their payment is for both the Employment Insurance Schemes and Invalidity Schemes. 

These contributions are divided into two categories: 

First Category

For employees who are less than 60 years of age. 

Contributions are paid by both employers and employees for this category. 

Employers contribute 1.75%, while employees contribute 0.5% of the employee’s monthly salary.  

Employees’ contributions are deducted from their salaries. 

Coverage includes the Employment Injury Scheme and the Invalidity Scheme. 

Second Category

For employees who have reached, or are more than 60 years of age. 

Eligible new employees who are 55 years of age must be covered under the Second Category.

The employer pays 1.25% of the employee’s monthly wages. 

Coverage is for the Employment Injury Scheme only.

Employment Insurance System

Contribution is mandatory for all employees aged 18 to 60.

Employees aged 57 and above who have no prior contributions before the age of 57 are exempt. 

Contribution rates are 0.4% of the employee’s assumed monthly salary. 

  • 0.2% will be paid by the employer and
  • 0.2% will be deducted from the employee’s monthly salary.

Contribution rates are capped at an assumed monthly salary of RM5,000. 

Contribution rates are subject to the rules in Section 18 of the Employment Insurance System Act 2017. 

Those not covered by the EIS are Government employees, domestic workers, and the self-employed. 

Applicants for EIS must prove that they are able to work, available to work, and actively seeking work.

Insured employees are eligible for EIS benefits with the following exceptions:

  • Voluntary resignation by the Insured Person
  • Expiry of the Insured Person’s fixed-term contract
  • Unconditional termination of a contract of service based on an agreement between the Insured Person and his/her employer
  • Completion of a project specified in a contract of service
  • Retirement of the Insured Person
  • Dismissal due to misconduct by the Insured Person

Checking contributions and Applying for benefits

Private sector employers are required to pay monthly contributions on behalf of each employee via PERKESO ASSIST Portal. 

Employees should check with their employers if contributions are regularly made according to schedule. 

To apply for benefits under Employment Injury Scheme, Invalidity Scheme, or Employment Insurance System (EIS), or to check detailed descriptions of scheme benefits, head to the PERKESO website and select the relevant scheme by scanning this QR code. 

Links to:

But what about the schemes for those Self-Employed and Housewives?  

It’ll be covered in Part 2! Stay Tuned! 


PERKESO (no date). Employed Workers. Available at  Retrieved April 15, 2023. 


International Labour Organisation (no date). International Labour Standards on Social security.  Available at:–en/index.htm. Retrieved April 15, 2023.


Official Website Department of Occupational Safety and Health (no date). Occupational Accident Statistic 2022. Available at: Retrieved April 15, 2023.




Researcher(s): Malcolm Wong

Reviewer(s): Muhammad Bahari

Editor(s): Angellina Choo

Designer(s): Yap Hei Mun

Leave a Reply

Your email address will not be published. Required fields are marked *

Interested in achieving financial literacy?

Subscribe to us now!

Interested in achieving financial literacy?