Four types of allowances payable to retrenched employees under EIS
The government has listed four types of allowances for retrenched workers under the newly proposed Employment Insurance Scheme (EIS), hoped to take effect beginning January 1 next year.
These allowances are: job search allowance, early re-employment allowance, reduced income allowance, training allowance, and training fee.
Clause 34(1) of the proposed EIS Bill seeks to provide that if the claim for benefits in respect of an insured person has been approved, the insured employee shall be entitled to the job search allowance at the rate specified in its Third Schedule.
The rates for job search allowance under the said Schedule is 80 per cent of the assumed monthly wages for the first month, 50 per cent for the second month, 40 per cent for the third month and fourth months, and 30 per cent for the fifth and sixth months.
The payment period meanwhile, shall be in accordance with the contributions qualifying conditions in respect, in respect of the claims for benefits by the insured employee, as stipulated under its Fourth Schedule.
The payment for the job search allowance is to also be made immediately after the waiting period ― seven days from the date of approval of claims for benefits.
The clause also sought to provide payment for the said allowance, though the insured employee has attained the minimum retirement age, if the retrenchment occurs before he or she reaches the said age.
Those who are employed during the insured period become ineligible and must inform the organisation within seven days.
Under the early re-employment allowance, individuals will get 25 per cent of the total job search allowance in cases where he accepts a job offer and reports for duty within the waiting period.
Reduced income allowance covers insured employees with more than one job and loses at least one during the coverage period, but does not lose all his work benefits. This person is entitled to a reduced income allowance for each job lost, based on the scheduled rates.
The same person may not concurrently claim the job search allowance, training allowance, or an early re-employment allowance, unless he loses all his jobs.
The training allowance allows insured workers who are retrenched to apply for allowance when in training with approved providers.
This must be inside the period when the job search allowance is active, but not more than 12 months, and is deactivated when the person receives a job offer or is rehired.
The training allowance would be paid at the rate of 25 pr cent of the assumed monthly wages calculated on a daily basis, but shall be subjected to a minimum of RM10, and a maximum of RM20, per day.