Simplifying Wage Subsidy Aid and Pre-Employment Card requirements

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Timboel Siregar Advocacy Coordinator of BPJS Watch and General Secretary of All Indonesian Workers’ Organization- Indonesian Workers Society Confederation (Organisasi Pekerja Seluruh Indonesia-Konfederasi Rakyat Pekerja Indonesia – “OPSI-KRPI”)

IO – President Jokowi’s launching of Wage Subsidy Aid (Bantuan Subsidi Upah – “BSU”) on 27 August 2020 proves that the Government is sincere about providing actual support for formal workers with wages lower than IDR 5 million. After active workers with wage levels higher than Untaxed Income (Pendapatan Tidak Kena Pajak – “PTKP”) were given PPh 21 Income Tax Incentive in April 2020 and the Pre-Employment Card Program was implemented for workers who were dismissed, job seekers, and informal workers whose business is interrupted, BSU was provided as aid for active workers and micro businesses. The aid given for each person and micro business in the Pre-Employment Card and BSU scheme is the same, i.e. IDR 2.4 million. 

Workers who are registered at the Employment Social Security Administrator (Badan Penyelenggara Jaminan Sosial – “BPJS”) per 30 June 2020, who paid their fees with a base wage of IDR 5 million, will automatically get BSU aid even though the company that employs them has delayed payment. Therefore, President Jokowi’s statement that “Workers who receive BSU aid are those who faithfully paid their fees” is incorrect. Even employees of companies with unpaid Employment BPJS for, say, March to June 2020 will still be considered as active participants who have the right to get BSU aid. 

If the requirement for becoming a BSU beneficiary is “being a worker who pays fees regularly”, then many workers would not be eligible for BSU because they haven’t been paying fees, even though they are registered as active at the Employment BPJS. In fact, many companies have had to delay payment of Employment BPJS due to the effects of the COVID-19 pandemic. Therefore, it is these workers with delayed fee payments who should be prioritized for BSU, because their companies are the ones hardest hit by COVID-19. I’m afraid the Minister of Labor did not provide the complete information to the President, which led our President to state that BSU beneficiaries are those who faithfully pay out their fees. 

Accelerating BSU Implementation 

With BSU, we hope that workers will have increased buying power. We hope that the implementation of BSU, Pre-Employment Card, micro business aids, and other social aids will indirectly support the increase of the aggregate consumption level by encourage medium- to upper-level citizens to shop (not withhold money), which will in turn encourage economic growth to a positive level in Quarter III of 2020. 

However, the Minister of Finance predicts economic growth in Quarter III at -2% to 0%. Therefore, we need to accelerate BSU implementation by speeding up validation. This will allow us to transfer money to 4-5 million beneficiary account every week, finishing the first stage in the third week of September. If we only set the target to 2.5-3 million accounts transferred a week from the time September starts, the target of 15.7 million accounts will only be completed in the first week of October 2020. If the first payment of BSU at IDR 1.2 million is made at the end of September or the first week of October, then BSU will be consumed in October, making it count for Quarter IV instead of Quarter III. 

The primary obstacle that slows down BSU implementation is the fact that there are still about 1.6 million unverified beneficiary accounts. For example, some bank accounts are no longer active, the person gave out the wrong account number (giving out a spouse’s account), etc. This issue may be resolved quickly in order to ensure that BSU is implemented in September. The issue of unverified account numbers must be mitigated by announcing to Employment BPJS participants that they need to submit their identity cards and account numbers to their nearest Employment BPJS branches and allow acceleration of the process. 

If Employment BPJS discovers inactive or incorrect account numbers, it must immediately contact the relevant employing companies. The companies will in turn inform their employees and request the correct information from them, or to request that they submit the correct information themselves to the closest Employment BPJS branch. To accommodate workers who don’t have bank accounts, BSU can be distributed via the post office. As the Employment BPJS has the data of the name of companies and the names and addresses of their employees, it can contact workers and tell them to pick up their BSU aid at the nearest post office. 

Let’s hope that the 15.7 million BSU participants honestly receive their first stage BSU and increase their buying power in September. Let’s prevent a Budget Surplus (sisa lebih penggunaan anggaran – “SILPA”) in the BSU item of the State Budget just because of some missing account numbers. 

Expanding Access Pre- Employment Card 

The PPh21, BSU, and micro business aids are relatively easier to get than the Pre-Employment Card. Even though offline registration of Pre-Employment Card is open to complement the online process, there are still frequent complaints of candidates finding it hard to get their Employment Cards. The failure rate is quite high. Furthermore, candidates must undergo training before they can obtain the IDR 2.4 million aid. 

Registration access to Pre-Employment Card should be simplified – it should be at least as easy for workers to get PPh21 incentive, BSU aid, and micro business aids. Dismissed workers tend to be jealous of beneficiaries of this particular BSU program, as Pre-Employment Cards are hard to get.

With a limited budget of IDR 20 trillion and a maximum participant quota of 5.6 million people, plus a very large number of registrars, Pre-Employment Card selection is very strict. 13 million people from all of Indonesia’s provinces have registered for the program, in four waves. With so many registrants wanting to get Pre-Employment Card, the Government should expand the registrant quota and increase its budget. 

By synchronizing and coordinating the data from the Government’s various cash aid programs, such as BSU and micro business aids, the selection of Pre-Employment Card participants will be made much easier. Regulation of the Coordinating Minister of the Economy Number 11 of 2020 prioritizes workers who are affected by COVID-19 and who haven’t received social aid from the Government for entry into the Pre-Employment Card program. Making the implementation of Pre-Employment Card easier and faster will also strengthen the buying power of dismissed workers and encourage economic growth in Quarters III and IV of 2020.