Participation in the Social Security Organisation’s Self-Employed Social Security Scheme continues to lag, with only about 10% of Malaysia’s 3.26 million self-employed individuals currently contributing.

Socso chief executive officer Datuk Seri Dr Mohammed Azman Aziz Mohammed said that as of 23 January, a total of 325,008 self-employed individuals were registered under the scheme nationwide. In Penang, the number of registered contributors stood at 15,021.

Hawkers And Small Traders Show Low Participation Rates

Contribution levels are particularly low among hawkers and small traders, a group that makes up a significant share of the informal economy. Nationwide, only 38,358 hawkers are registered under the scheme, with Penang accounting for 5,053 contributors, or 13.17% of the state’s registered hawkers.

Socso said this indicates that a large number of small-scale traders remain outside formal social protection arrangements, despite facing occupational risks on a daily basis.

Local Authority Partnerships Target Protection Gaps

To address the low take-up, Socso has stepped up engagement with state and local authorities, focusing on community-level outreach to self-employed workers.

As part of this effort, Socso signed a memorandum of understanding with the Penang Island City Council, marking the first such collaboration between the agency and a local authority. The agreement is intended to strengthen access to social protection for hawkers and small traders through closer coordination at the municipal level.

Socso said it hopes the Penang initiative will be replicated by other local authorities across the country.

Claims Data Shows Financial Impact Of Work-Related Risks

According to Socso, RM31.25 million in benefits was paid out nationwide in 2025 under the Skim Lindung Kendiri, benefiting 7,693 contributors.

In Penang, 424 self-employed individuals received assistance after experiencing accidents or other work-related incidents, highlighting the financial impact such events can have on those without stable income streams.

Daily Operational Risks Remain A Key Concern

Penang Island City Council mayor Datuk A. Rajendran said the council oversees 5,220 licensed hawkers operating across markets, food complexes, hawker sites, and temporary stalls.

He noted that hawkers regularly face risks such as accidents, equipment-related injuries, fires, and health hazards, which can disrupt income and business continuity.

Digital Freelancers Also Face Income Disruption Risks

While much of the outreach has focused on hawkers and small traders, Malaysia’s self-employed workforce also includes a growing number of digital freelancers and gig workers.

This group includes designers, developers, writers, online sellers, content creators, delivery riders, and platform-based workers who operate without employer-backed social protection. Many rely on project-based or task-based income, which can stop immediately if they are unable to work due to illness, accidents, or other unexpected events.

Although their occupational risks may differ from those faced in physical trading environments, the financial impact of income disruption can be similar. Without structured protection, even a short break from work can affect cash flow and savings.

Closing The Protection Gap For Informal Workers

The low participation rate under the Skim Lindung Kendiri underscores ongoing challenges in extending social security coverage to Malaysia’s self-employed workforce.

For individuals who depend on daily earnings, even short disruptions caused by injury or accidents can have immediate financial consequences. While the scheme offers protection against specific risks, uptake appears closely tied to awareness, perceived value, and ease of access.

Socso’s increased collaboration with local councils reflects a shift towards more targeted outreach. Over time, this approach may shape how self-employed workers assess income protection and the role of social security in managing financial uncertainty.

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