In a significant move to strengthen Malaysia’s social safety net, the Social Security Organisation (PERKESO) has just announced a major overhaul of the Employment Insurance System (EIS) benefits. The changes, set to take effect for all new claims starting August 1, 2025, include an increase in the maximum claimable benefits and the introduction of a new training grant aimed at reskilling retrenched workers.
This announcement is crucial for both employers and employees to understand. For employees, it offers a more robust cushion during periods of unemployment. For employers, it highlights the critical importance of maintaining accurate and timely EIS contributions.
What’s New? A Closer Look at the Enhanced EIS Benefits
The core of the announcement is a tangible increase in financial support for individuals who have lost their jobs.
- Increased Job Search Allowance (JSA): The maximum monthly benefit amount, which is calculated based on the insured salary ceiling, will be increased. This provides more meaningful financial support for retrenched workers while they search for new employment.
- New “EIS Training Plus” Grant: A new grant will be introduced specifically for retrenched workers to pursue high-skill certification courses in nationally recognized strategic sectors, such as the digital economy, green technology, and advanced manufacturing. This is in addition to the regular JSA payments.
The Rationale Behind the Changes
According to the Ministry of Human Resources, this initiative is designed to achieve two primary goals:
- Strengthen Social Protection: To provide a more adequate safety net that reflects the current cost of living and salary levels.
- Encourage High-Value Reskilling: To incentivize retrenched workers to upgrade their skills in high-demand areas, improving their long-term employability and contributing to the nation’s economic growth.
What This Means for Employers
It is important to note that this announcement does not change the current EIS contribution rates for either employers or employees. The enhancements will be funded through the existing EIS fund.
However, this development underscores several key points for businesses:
- Importance of Compliance: The value of EIS benefits is now higher than ever. This makes it absolutely critical for employers to ensure that all monthly EIS contributions are calculated and submitted accurately and on time for every employee. Failure to do so could result in penalties and may jeopardize an employee’s ability to claim their rightful benefits.
- Positive Impact on Offboarding: In the unfortunate event of a retrenchment exercise, employers can now communicate these enhanced benefits to affected employees, showing that a stronger support system is in place for their transition.
- Talent Development: The new training grants align with national goals, and companies can see this as a positive step towards creating a more skilled and resilient national workforce.
How SMONE Ensures Your Compliance and Peace of Mind
Accurate and timely statutory contributions are the foundation of Malaysia’s social safety net. Any error in your payroll calculation can have significant consequences for both your business and your employees.
SMONE’s Payroll & HR Compliance service takes this critical responsibility off your shoulders. Our systems are always updated with the latest regulations from PERKESO, EPF, and LHDN. We guarantee that every contribution is calculated correctly and submitted on time, every time. This ensures your business remains fully compliant and your employees are fully protected.
Contact us today to learn more about our professional payroll solutions.
(Disclaimer)
This article is for general informational purposes and is based on recent public announcements. The specific details and mechanics of the new benefits are subject to final circulars from PERKESO. This does not constitute legal or HR advice.