This article first appeared in The Edge Malaysia Weekly on August 3, 2026 - August 9, 2026

BARELY a month after the rollout of the Lindung 24 Jam social security scheme, the government has backtracked on the mandatory employee contributions to the scheme following public backlash, saying that it is now voluntary.

The public’s discontent stemmed from having less of their pay to take home after the mandatory deduction, of 0.75% of their salary (capped at RM6,000) for two years under Phase 1. The deduction will be raised to 1% after two years and to 1.25% from the sixth year onwards.

There are also those who have misunderstood the purpose of Lindung24 Jam, thinking that it is a duplicate of the existing Socso protection, when in fact it covers risk occurring outside of working hours, says the Social Security Organisation’s group CEO Datuk Seri Mohammed Azman Aziz Mohammed.

“These concerns are understandable,” he tells The Edge, noting that the government has listened carefully to the feedback from the public and have subsequently refined the implementation while continuing to strengthen public engagement and awareness efforts.

Mohammed Azman stresses that this scheme is different from a private insurance policy. “We are a social protection agency, the safety net for workers. We are the last net. If you fall below this net, you will go into poverty. We are not in the insurance industry,” he points out.

“Socso has been the one looking after the workers and their dependents in terms of replacement of their income, to make sure there’s food on the table — that is our role. So, Lindung 24 Jam is not something new. It is there to complement the existing social protection scheme that we have.”

Mohammed Azman says it is important to note that the government has never positioned Lindung 24 Jam as a replacement for private insurance or medical cards. 

The key difference being, while private insurance meets individual preferences and financial goals, Lindung 24 Jam acts as a foundational layer of social security. “The two systems complement each other rather than compete, allowing workers with existing private insurance policies to enjoy their benefits according to the policy terms while remaining fully eligible for Socso benefits,” he says.

Mohammed Azman points out that the Lindung 24 Jam scheme is not something that was hatched overnight, but it has been deliberated on for almost a decade — since 2017.

“It went through many processes and engagements with all the stakeholders, such as the employers’ group, employees’ associations, the Malaysian Trades Union Congress (MTUC), union employees and others. We had a roadshow nationwide,” he says.

The proposal was subsequently tabled in parliament and received approval before the scheme was launched.

“I want to emphasise that the deliberation was not done overnight. It was an extensive engagement and extensive deliberation with all the stakeholders,” says Mohammed Azman.

The CEO points out that Socso has its own in-house actuary team that looks into the numbers to calculate the initial payment and long-term liability of the scheme.

“The calculations are done in-house by our own actuary team. We don’t pluck numbers out of the air. And in fact, I think our data points are one of the largest because we have about 11.08 million workers [in the database],” he says.

With the contribution rate schedule for Lindung 24 Jam legally gazetted under the Employees’ Social Security (Amendment) Act 2026, Socso says it has no intention to accelerate contribution rate hikes beyond the gazetted legislative road map. 

Mohammed Azman assures that Socso adopts a prudent and disciplined approach to managing all of its social security schemes, where its decisions are guided by evidence and sound actuarial practice as well as the long-term interests of Malaysian workers.

Socso, which also handles the Employment Injury Scheme and Invalidity Scheme for workers, has never reviewed its contribution rate since its establishment, the CEO points out.

“We started with a 1.25% contribution for the employment injury scheme in 1971. Then in 1974, we introduced the invalidity scheme at 1% contribution shared by employer and employee. We have never reviewed the rates,” says Mohammed Azman.

“With the introduction of Lindung 24 Jam, we took all this experience in claims and trends that we have had for the last 55 years and applied them, so we know roughly the requirements for short-term and long-term [liabilities].”

It is worth noting that Socso did not receive any seed funding from other parties for the schemes, meaning that the entire amount of funds available comes purely from employees’ and employers’ contributions and through its investment mandate to grow the funds’ reserves.

Mohammed Azam highlights that apart from the immediate claim payout, the contributions collected are kept for long-term liability — being the replacement income for workers or their dependents, giving them some form of long-term financial security. Socso currently has more than 600,000 long-term benefit receipts.

The CEO says its recorded total revenue, consisting of employees’ and employers’ contributions and investment returns, stands at RM10.4 billion while its total expenditure came to RM7.8 billion in 2025.

“People will say, ‘Wow, that is an excess of RM2.6 billion. But you have to remember that this excess will have to be put back into the reserves because it is for the long term,” he explains.

Unsurprisingly, when the Lindung 24 Jam opt-out period opened on July 13, many employees took the opportunity to submit their declaration to opt out of the scheme.

Socso is unfazed by this as the organisation had anticipated an initial surge in opt-out declarations by those who prioritise their immediate take-home pay. “The opt-out rate is expected to stabilise as public awareness increases about the comprehensive safety net provided, which includes medical treatment, temporary disablement benefits, access to rehabilitation, medical implants and dependants’ pensions,” says Mohammed Azman.

He did not reveal the number of workers who have opted out of the scheme, only saying that Socso is monitoring this in real time and will only be able to share the full picture after the opt-out period closes on Aug 31.

Mohammed Azman made three broad observations of those who have chosen to opt out from the scheme so far. It is interesting to note that the employees who opted out are mainly in the 20 to 34 age group.

“This is one of the demographics that really needs social security protection because they are in the early stage of employment. They are at higher risk as they are more active. If anything happens to them, they might not have enough savings and they don’t have a replacement income,” he says.

“This is to say they will have to rely on whatever savings they have with the Employees Provident Fund and also other savings that they might have. So, this is quite alarming.”

Socso observed that the majority of those who opted out work in major cities across Selangor, Johor and Penang, as well as Kuala Lumpur. They earned monthly salaries of about RM4,000 and above.

When asked what could happen to the scheme if too many Malaysian workers choose to opt out of the Lindung 24 Jam scheme, Mohammed Azman says sustainability will definitely be a concern if Socso does not have the numbers. “But that will not be our loss, it will be their [the workers] loss,” he says frankly.

He adds that Socso exists to provide the best for the labour market through the best possible formulation for schemes. “Our intention is very simple, that is, to make sure the labour market ecosystem is stable and to make sure we are the last safety net to protect workers before they fall into poverty.

“If worse comes to worst, where things cannot move as planned, we have no problem in terms of reviewing it. Because at the end of the day, it is not about Socso or the ministry. It is about the workers.”

At this juncture, Socso is doing the number crunching, says Mohammed Azman, reiterating that the full picture can only be presented later on as the organisation would need to look at a slew of factors before presenting its findings.

However, before coming to that bridge, the organisation is continuing its efforts to engage with employees, monitoring the experience of the scheme and strengthening public understanding of the protection it provides.

“As more Malaysians become familiar with the benefits of 24-hour coverage, we are confident Lindung 24 Jam will continue to strengthen social protection for workers and their families,” he says.

Furthermore, the Ministry of Human Resources will conduct a thorough review towards the end of the year, specifically analysing the policy direction, implementation effectiveness and fund sustainability under the voluntary model,” says Mohammed Azman.

He adds that should the evaluation reveal risks to the scheme’s long-term viability, the findings will be presented to parliament to propose necessary legislative amendments to the Employees’ Social Security Act 1969 [Act 4].

It is worth noting that in the first month of the implementation of Lindung 24 Jam, Socso paid out claim benefits amounting to RM1.2 million, not including long-term payments — the monthly pension — to the next of kin.

The long-term payment benefits come in the form of a monthly pension for the next of kin, providing lifetime support for the spouse and children of the deceased, who will receive the payment until the age of 21 or up to graduation for their first degree.

Mohammed Azman says the amount was within the “acceptable rate”. He believes the scheme is providing the protection as intended.

Socso says the total benefit payments under Lindung 24 Jam have exceeded RM4.2 million within two months of its implementation, including support for rehabilitation devices and implants, as well as payments for the Temporary Disablement Benefit.

The CEO points out that it is important for workers to appreciate the value of the protection provided under the Lindung 24 Jam scheme.

“During the current implementation phase, a worker earning RM3,000 a month contributes RM22.15 monthly under Lindung 24 Jam. Put differently, that is equivalent to about 74 sen a day, or less than half the price of your daily cup of tea or coffee,” he says.

“Yet if that worker suffers total permanent disablement due to an eligible accident, the worker is not left to face the consequences alone. The scheme provides income replacement, financial support for dependents, funeral benefits, as well as unlimited medical treatment and rehabilitation services to support recovery and long-term well-being.”

Mohammed Azman believes that all Malaysian employees should opt into the scheme, saying that it is an essential, highly affordable social safety net designed to guarantee baseline protection. 

“Social security doesn’t only exist in Malaysia, it exists in more than 190 countries around the world. As Malaysia is moving towards a high-income nation, one of the most important requirements in The Decent Work Agenda (a policy framework created by the International Labour Organization) in terms of the labour ecosystem, which is social protection,” he says.

In 2025, Socso’s assets under management hit RM40.8 billion. Its total revenue — which includes contributions from active employees and returns on investment — totalled RM10.4 billion, while the total amount in claims and benefits paid out across all four of its schemes totalled RM7.8 billion. 

The four schemes are the Employment Injury and Invalidity, Employment Insurance, Self-Employment Social Security and Housewives Social Security.

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