Indonesian Govt Distribute Wage Subsidy Program 2021 to Aid Economic Growth

August 26, 20213:40 pm585 views
Indonesian Govt Distribute Wage Subsidy Program 2021 to Aid Economic Growth
image source: Indonesian Ministry of Labour

Wage subsidy (Bantuan Subsidi Upah – BSU) program for Indonesian workers this year is one of the govt’s attempts to mitigate the aftermath of COVID-19 pandemic. The initiative is expected to secure and enhance workers’ financial stability, while helping employers ensure their business sustainability during the enforcement of public activity restrictions that is implemented due to rising cases of COVID-19.

According to Anwar Sanusi, General Secretary of Indonesian Ministry of Labour, the ministry noted a total of 24.66% of workers from critical, essential, and non essential sectors are at risk of layoff due to the restrictions. To prevent massive unemployment or at least minimize the risk, the govt is committed to relieve company’s burden by distributing wage subsidy and other types of subsidies. This is done to ensure that business can stay operating.

Differences in 2020 and 2021 Wage Subsidy

The wage subsidy distributed this year has slight differences from the one in 2020. The first difference lies in terms of the scope. In 2020, the wage subsidy is eligible for workers from all regions in Indonesia. Meanwhile in 2021, the wage subsidy is only eligible for workers in regions implementing the public activity restrictions within Level 3 and Level 4. This is regulated in Ministry of Home Affairs Instruction No. 20 Year 2021 to No. 23 Year 2021. 

The second difference is in terms of wage range. In 2020, the maximum wage of workers eligible to receive the subsidy was 5 million rupiah. This year, the maximum wage of workers eligible to receive the subsidy is 3.5 million rupiah or rounded up according to regions with more than 3.5 million rupiah standard wage.

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Ensuring Data Synergy

Anwar hopes that the main goal of the wage subsidy program will give a social safety net for workers who are negatively impacted by the restriction policy. He also expects that only those targeted workers for the subsidy are eligible for the fund. In ensuring this, the implementation of clear and clean principles must be done, meaning it is clear in regulation and clean in terms of data. The implementation and distribution of the wage subsidy needs to go hand in hand with other regulations. No data duplication should occur. Workers who are eligible for this program will not receive Pre Employment Benefit, Family Hope Program (PKH), and Micro Enterprise Government Initiative (BPUM).

Continuous synergy with Indonesian Workers Social Security Agency (BPJS Ketenagakerjaan) is required in collecting data of workers eligible for the fund. Anwar believes that the implementation and distribution of the wage subsidy this year will be better than one in 2020 if the procedure is clear and clean. Thus, the main goal of the government for this initiative can be reached.

Stages of Implementation

Surya Lukita Warman of Indonesian Directorate General of Training and Productivity Development explained that the funding for the wage subsidy is allocated from 2021 Budget Implementation List of Director General for Industrial Relations and Social Security. The mechanism for the wage subsidy distribution is as follows. The Indonesian Ministry of Manpower (Kementerian Ketenagakerjaan) obtains data of workers eligible for the subsidy from the Workers Social Security Agency. 

Next, the Workers Social Security Agency validated and verified the bank accounts of eligible workers prior to submitting it to the Ministry of Manpower. This includes checking and screening for data compatibility, comprehensiveness, and data duplication. Following this step, the data are submitted to the Director General for Industrial Relations and Social Security. Data of those who are eligible for the wage subsidy are collected to later be enacted as the wage subsidy subject. The last step is transferring the subsidy to personal bank accounts of these workers.

Surya Lukita added that the information channel for 2021 wage subsidy can be accessed through the Ministry of Labor’s official website and its official call centre. Information regarding eligibility and distribution status of this wage subsidy can be accessed by inputting ID number through these two channels.

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