Business people in Indonesia are faced with a new controversy in the form of a number of pros and cons regarding the Public Housing Savings (Tabungan Perumahan Rakyat or "Tapera") programme which have emerged between Entrepreneurs and the Government.

At this point in time, the Government and the House of Representatives have entered the final stage in the preparation of the Tapera legislation in order to have it enacted in the very near future. According to the Head of the Public Housing Savings Special Committee, the Public Housing Savings Bill (the "Bill") will be passed into law in March 2016. The enactment of the Bill is aimed to support private sector employees and those who are self-employed in obtaining housing which is fit for habitation. Every worker, both private sector employees and those who are self-employed, whose income is above the minimum wage and is at least 18 years old or is married will be required to register as a member of the Tapera programme. The member's contribution to the Tapera program will be 3% of the monthly salary, 2.5% to be borne by the employee and 0.5% by the employer, to be paid into the member's account, which will be managed by a Custodian Bank.

The thinking behind the Bill originates from a number of factors, including the mandate of the 1945 Constitution of the Republic of Indonesia, which is stated in its opening, and Article 100 of the Law concerning Employment, which in essence requires companies/employers to provide welfare facilities for the workers and their families.

In addition, the data from the Central Bureau of Statistics (Badan Pusat Statistik or BPS) shows that the shortage in the supply of homes has reached 13.5 million housing units. That number will continue to rise as the increase in housing needs is considerably faster than the increase in housing construction. The shortage of homes will keep rising despite the launch of the Government's Million Houses Program (Program Sejuta Rumah) in April 2015. Low budgetary allocation for the housing sector, according to the Director General of Housing Finance, the Ministry of Public Work and Public Housing, is one of the causes of the housing backlog (the discrepancy between the number of houses built and the number of houses that need to be built) in Indonesia, in addition to poverty. These factors lower the purchasing power of Indonesians, and so the percentage of home ownership is still low. Therefore, the enactment of the Bill is expected to increase the budget allocation in the housing sector and at the same time reduce the burden on the State Budget (Anggaran Pendapatan dan Belanja Negara or APBN).

APINDO rejects the Bill

On the other side, the Indonesian Employers Association (Asosiasi Pengusaha Indonesia or APINDO) objects to the Bill as it could add an unnecessary new burden, especially since workers and employers are already subject to various mandatory dues, among which are: state pension (Jaminan Hari Tua or JHT), life insurance, work related accident insurance, pension fund, health insurance, and severance pay reserve. Thus APINDO is of the opinion that Tapera will further burden employers.

Furthermore, according news items which we have confirmed from our own sources, APINDO is arguing that formal sector workers and self-employed workers who are members of the Social Security Administration Body for Employment (BPJS Ketenagakerjaan) actually already participate in a housing program. Such rules can be found in Government Regulation No. 99 of 2013 and Government Regulation No. 55 of 2015 concerning Employment Social Security Asset Management. Under this rule, BPJS Ketenagakerjaan provides a program for down payment assistance and interest subsidies in relation to mortgages (Kredit Pemilikan Rumah or KPR) which derive from the 30 per cent of the Rp 180 trillion portfolios managed by the JHT or about Rp 54 trillion.

APINDO has stated that since subsidizing a housing down payment or a mortgage has been mandated by the Government in BPJS Ketenagakerjaan, the Tapera program is unnecessary as it has already been adopted in the BPJS Ketenagakerjaan program, and forms part of the business world's responsibility. Moreover, the targeted member/participants are the same as BPJS Ketenagakerjaan, i.e., formal sector workers and self-employed workers.

This writer is of the view that the existence of the Tapera program is exclusively to aid workers in obtaining housing at affordable prices. The total contribution of 3% that will be deducted from the worker's monthly salary to be deposited through a custodian bank is only for the purpose of housing savings, while the monthly BPJS Ketenagakerjaan contribution consists of several components as explained earlier in this article.

A conflict that may arise when the Bill is passed is the possibility of it overlapping with BPJS Ketenagakerjaan, one of the purposes of which is also to provide the workers with housing ownership program through the Employment Social Security Asset Management under the JHT. It will be interesting to examine the effect of the Bill's conversion into legislation will be applied. We will publish a continuation of this article once the Bill comes into effect.


Article 3 Tapera aims to:
  1. collect and provide cheap long term funds in order to finance affordable housing;
  2. meet the needs of its members in relation to housing;
  3. provide convenience for the members in accessing housing finance;
  4. provide legal certainty to its members in obtaining housing finance; and
  5. provide protection for its members in obtaining housing finance.
Article 7
  1. Every Indonesian citizen who is employed or self-employed must become a member of Tapera.
  2. Tapera members as referred to in paragraph (1) must meet the following requirements:

    1. have an income above the minimum wage; and
    2. be at least 18 (eighteen) years of age or married at the time of registration.
Article 15
  1. the Members Savings Amount as referred to in Article 8 paragraph (1) is set at 3% (three percent) of:

    1. Salary or Wages to a maximum of 20 times the minimum wage for the Members referred to in Article 8 paragraph (1)(a).
    2. The average income per month of the previous year to a maximum of 20 times the minimum wage for the Members referred to in Article 8 paragraph (1)(b).
  2. The Savings Amount referred to in paragraph (1)(a) shall be divided between Members, in the amount of 2.5%, and Employers, in the amount of 0.5%.
  3. The Savings Amount referred to in paragraph (1)(b) shall be borne solely by the Members.
Article 16
  1. The Employer shall deduct the Savings Amount which is the obligations of the Employee.
  2. The Employer shall deposit the Savings Amount referred to in paragraph (1) and the Savings Amount which is the obligations of the Employer into the member's account which is managed by the Custodian Bank.
  3. Self-Employed workers must deposit their own Savings Amount which is their obligation into the member's account which is managed by the Custodian Bank.
  4. The Custodian Bank referred to in paragraph (2) shall have equal rights and obligations in accordance with legislation in the field of capital markets.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.