Malaysia’s job-loss safety net is set for an upgrade. The Employment Insurance System (Amendment) Bill 2025, tabled for first reading in the Dewan Rakyat on Nov 4, seeks to amend the Employment Insurance System Act 2017 (Act 800) to raise benefits and introduce new allowances for workers who lose their jobs, marking another step in PERKESO’s push to strengthen social protection.
The Bill comes just days after the announcement of LINDUNG 24/7, a forthcoming scheme to extend protection to employees beyond working hours.
Both initiatives form part of a broader reform agenda led by the Human Resources Ministry to ensure that every worker is protected, regardless of the circumstances.
Updating a lifeline for workers
In an era of short-term contracts and economic uncertainty, job loss has become an all-too-common experience for many Malaysians.
The amendments aim to modernise the Employment Insurance System (SIP), a programme that provides temporary income and retraining support, so it remains relevant to a rapidly changing labour market.
Introduced in 2018, SIP offers both financial assistance and skills training to help jobseekers regain stability. More than 363,000 workers have benefited since its inception, with over RM900 million in aid disbursed.
For many, this support bridged the gap between retrenchment and re-employment – paying rent, buying groceries, and keeping families afloat while they retrained for new roles.
What the amendments propose
Under the proposed reforms, PERKESO will expand assistance to speed up re-employment and strengthen support for jobseekers. The new provisions aim to encourage upskilling, reward early job placement, and ease relocation costs.
Key proposed changes include:
Training allowance raised from RM20 to RM30 per day, recognising the cost of attending upskilling courses.
Maximum training fee increased from RM4,000 to RM7,000, allowing access to higher-quality programmes.
Early Re-employment Allowance (EBSA) doubled from 25 percent to 50 percent of the remaining Job Search Allowance (EMP) balance, rewarding those who secure new jobs sooner.
New Mobility Assistance Allowance (EBM) of RM1,000 (one-off) for workers accepting employment more than 100km from home.
The Job Search Allowance (EMP) structure, providing up to six months of income replacement, beginning at 80 percent of prior wages, remains unchanged.
If approved, this would mark SIP’s most significant upgrade since its rollout seven years ago, enhancing both financial relief and long-term employability.
Turning disruption into opportunity
The proposed SIP 2025 framework emphasises rebuilding rather than mere recovery. By pairing financial aid with targeted reskilling, PERKESO seeks to help workers return to the job market stronger than before.
The higher daily allowance acknowledges that training is an investment of both time and money, while the new mobility benefit recognises that opportunities may lie far from home.
The reforms are also intended to address the uneven geography of job growth. By easing relocation costs, PERKESO hopes to encourage labour movement toward high-demand areas and growth sectors, reducing friction in the national job market.
Ultimately, the focus is on turning disruption into opportunity, ensuring that a job loss becomes a bridge, not a dead end.
Part of a wider protection agenda
The SIP amendments under Act 800 and the announcement of LINDUNG 24/7 are twin components of PERKESO’s broader effort to expand Malaysia’s social-security coverage.
LINDUNG 24/7, unveiled by Human Resources Minister Steven Sim on 31 October, aims to extend protection to accidents and incidents outside working hours.
Like the SIP 2025 proposal, it has yet to take effect pending the passage of its own legislative amendment – in this case, to the Employees’ Social Security Act 1969 (Act 4).
Where LINDUNG 24/7 focuses on physical protection, SIP 2025 targets economic resilience. Both share the same philosophy: comprehensive and continuous protection for every worker, in all situations.
PERKESO views these reforms as part of a long-term strategy to build a responsive, inclusive social-security system, one that keeps pace with automation, the gig economy and new forms of employment.
Toward a resilient workforce
As Malaysia accelerates its digital and economic transformation, the need for inclusive protection has become urgent. The proposed SIP enhancements align with national priorities under the Madani framework – empowering individuals to withstand shocks while pursuing new skills and opportunities.
By combining income support with retraining and mobility incentives, PERKESO aims to create a system that cushions workers during downturns while helping the economy rebound faster. The goal is simple yet vital: when work ends, life should not grind to a halt.
With the Employment Insurance System (Amendment) Bill 2025 now before Parliament – and LINDUNG 24/7 awaiting its own legislative path – Malaysia’s social-protection framework continues to evolve in step with the realities of modern work.
The proposed measures underscore a steady shift toward policies that prioritise employability, adaptability, and protection, helping workers navigate change with greater confidence and stability.
Learn more about the Employment Insurance System (LINDUNG KERJAYA) today.
This Social Security series is in collaboration with PERKESO.
