The public outrage over mandatory Lindung 24/7 contributions shows that many Malaysians don’t understand the concept of social insurance.
Social insurance works precisely because of statutory contributions. When everyone in a certain population (in this case, the workers’ population) is required to contribute to a national insurance scheme, the risk pool is huge.
The Social Security Organisation (Socso) collected nearly RM58 million in contributions to Lindung 24/7 (or Non-Employment Injury Scheme) from about 2.2 million employees (1.92 million Malaysian and 307,000 foreign workers) as of July 9.
This may sound a lot, but the 2.2 million Lindung 24/7 contributors comprise only 23 per cent of 9.6 million active Socso contributors. This means that the vast majority, or 7.4 million people, were not yet enrolled before the Cabinet made the scheme voluntary on July 8, hence Lindung 24/7 income is probably many times higher than RM58 million monthly.
Income from contributions to Lindung 24/7 – which covers accidents that occur outside working hours and are not directly related to one’s job – is meant to fund claim payouts. Nearly RM2 million was paid out in just the first month of implementation in June, based on an average of 27 cases daily.
Insurance works when an insurer is able to make very large payouts to an individual policyholder that often exceed the amount of contributions made prior to submitting a claim.
For example, a person earning RM5,000 monthly pays RM37.15 a month or RM445.80 a year in Lindung 24/7 contributions. If she makes a claim for temporary disablement, due to six months of medical leave following a severe accident, she is eligible to receive a payout of more than RM14,000.
This RM14,000 payout is equivalent to 31 years of contributions, but the worker can receive that money after contributing just RM37.50 for a month. In fact, there are no waiting periods for Lindung 24/7 claims, unlike private health insurance that typically denies claims made within two years of a policy.
Lindung 24/7 contributors can submit claims on the first day of coverage under the Employees’ Social Security (Amendment) Act 2026. In fact, a total of 1,056 claims has already been submitted to Socso.
If a worker earning RM5,000 monthly claims for permanent disablement at age 40, they are eligible to receive a payout of RM2,673 a month for the rest of their life, equivalent to a total compensation of more than RM800,000 (assuming an early death at age 65 due to 100 per cent impairment post-accident).
Lindung 24/7 can make such huge payouts because of mandatory contributions from an estimated 9.6 million active Socso contributors (before the Cabinet made the scheme voluntary). With the Employees’ Social Security (Amendment) Act 2026 in force, employers are legally required to automatically enrol their employees into Lindung 24/7.
If employees do not want to participate in Lindung 24/7, they must opt out by signing a liability waiver from today. An opt-out feature, as opposed to opt-in, is the only saving grace for the scheme in this brouhaha.
But if a significant number of contributors opt out or if employers breach the law by not registering their employees for Lindung 24/7, Socso may be forced to drastically raise contribution rates from the initially planned 0.75 per cent (first two years), 1.0 per cent (next three years), and 1.25 per cent (sixth year onwards), or even resort to arbitrary denials of claims to reduce payouts.
This is exactly what is happening in private health insurance. In a 2025 Public Accounts Committee (PAC) inquiry, the insurance industry defended health insurance premium hikes, citing “scary” medical inflation averaging at 16.1 per cent a year that led to rising claims costs. For every ringgit in premium income collected, 92.96 sen is paid out for claims.
Insurance CEOs and chairmen, who weren’t medical doctors, repeatedly complained to parliamentarians about “overtreatment”, as they questioned the need for health screenings, investigations, and hospitalisations, particularly for gastrointestinal issues.
CodeBlue’s October 2025 survey among 855 specialists practising in private hospitals revealed that insurers routinely used “deny, delay, revoke” tactics to interfere with clinical decisions and avoid making payouts.
The voluntary nature of private health insurance means that each insurance and takaful operator’s (ITO) risk pool is small, as opposed to Lindung 24/7’s single risk pool of up to 9.6 million people.
In the private health insurance market, premiums go up when the number or cost of claims increases in an older and sicker risk pool; unaffordable premium hikes (including for younger adults) force more policyholders to exit the risk pool, triggering a vicious cycle of unsustainability.
Lindung 24/7 is protected from sharp contribution hikes and denials or delays of guarantee letters (GLs) – Socso says its GLs are produced within 24 hours – only because the scheme is mandatory for all formal workers, which means that the growth of its risk pool remains sustainable from new contributors entering the workforce.
Unlike private health insurance, a Lindung 24/7 contributor’s coverage isn’t voided and their contributions don’t increase after submitting a claim.
Many critics assert that Lindung 24/7 shouldn’t be compulsory because some already have personal insurance and statutory contributions hurt the poor more than the rich. The reverse is true.
Making Lindung 24/7 optional means that higher-income earners – who have personal accident, medical, or life insurance – are more likely to opt out. Left with a smaller than expected risk pool, contribution rates may increase beyond initially planned rates, affecting everyone (including lower-income earners without personal insurance) who remain subscribed to Lindung 24/7.
People with a lower risk of accidents may also choose not to subscribe to Lindung 24/7 because they’re less likely to claim benefits, such as car owners or those who don’t travel much. The risk pool is then left with higher-risk people who are far more likely to make claims, such as motorcycle owners who tend to be low-income.
Malaysian roads are reportedly the second deadliest in the world at more than 22 road traffic fatalities per 100,000. Experts describe road traffic injuries in Malaysia as a “critical public health and economic crisis”.
Motorcyclists and pillion riders reportedly account for the highest number of road accident fatalities in Malaysia each year, making up to 70 per cent of the annual average of 6,000 deaths.
Lindung 24/7’s medical benefit primarily covers treatment at government clinics or hospitals. Implants, such as spine or bone implants that are typical for trauma cases, are out-of-pocket expenses in public hospitals.
Hence, again, Lindung 24/7 is necessary for lower-income people, but wealthier Malaysians with a good medical plan may choose not to contribute to the scheme if they prefer treatment in a private hospital with shorter waiting times and more advanced medical technology.
Some have suggested mandating employer contributions to Lindung 24/7 that is fully borne by employees. This doesn’t make sense because the scheme covers personal and non-work-related accidents, such as those occurring at home or during recreational activities. Our bosses aren’t in charge of our personal life.
Demanding refunds of contributions is also nonsensical because the contributions we paid were to cover us for a specific period of time, regardless of whether we submitted claims.
My only criticism of Lindung 24/7 was the lack of town halls with the general public – beyond multiple engagement sessions with workers’ unions and employer associations – prior to the tabling of the Employees’ Social Security (Amendment) Bill in October 2025.
Proposed legislation involving statutory contributions – be it for Lindung 24/7 or perhaps national health insurance in future – requires genuine consultation with ordinary citizens for public support, not just non-governmental organisations (NGOs).
Public town halls might have educated ordinary Malaysians about the concept of social insurance. Social insurance works only because everyone contributes, both rich and poor.
Higher-income people must pay (and they pay more), even though they’re less likely to utilise benefits that may be more frequently claimed by poorer people. Lower-income people must pay, even as little as RM12.75 a month for minimum-wage workers.
Under this social contract with a shared sense of responsibility and ownership, the rich pay even though they don’t need Lindung 24/7 and the poor pay despite not earning much.
As per Socso CEO Mohammed Azman Aziz Mohammed’s remarks at a recent press conference, Malaysians should view Lindung 24/7 contributions as an “investment” to protect themselves and their families.
Personally, I won’t opt out of Lindung 24/7 because of its temporary disablement and rehabilitation benefits that aren’t available or are very limited in my personal insurance policies. Before this controversy broke out, I wasn’t really aware of the scheme or Socso benefits in general.
Now I’ll tweet if I get an injury and wait for Skuad Perkeso Prihatin to contact me even before I submit a claim.
The Cabinet must reverse its decision to make Lindung 24/7 voluntary. Otherwise, this laudable scheme – one of the Madani government’s most notable policies – may be killed when it’s no longer sustainable.
Boo Su-Lyn is co-founder and editor-in-chief of CodeBlue.
- This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.
