As reported by Kompas, in September 2024, 11 Indonesian labour unions joined forces to contest Indonesia’s Law No. 4 of 2016 on Public Housing Savings (Tapera) in the Constitutional Court. Their central argument is that the mandatory Tapera contributions are an unbearable burden for many workers already struggling under the weight of numerous payroll deductions.
Understanding Tapera
Tapera, or the Public Housing Savings program, is a national initiative established by the Indonesian government through Law No. 4 of 2016. It aims to provide a stepping stone for Indonesian workers, particularly those with limited financial means, to realise their dreams of homeownership.
Tapera operates on the principle of collective savings, pooling mandatory contributions from both employees and employers into a national fund. This fund then serves as a reservoir for providing housing loans and financial assistance to qualified workers, paving the way for them to acquire their own homes.
Tapera’s administration falls under the purview of BP Tapera, a government-appointed agency entrusted with the collection, investment, and distribution of funds. BP Tapera oversees the entire system, encompassing participant registration, contribution management, financing of housing projects, and ensuring the scheme’s smooth operation. It collaborates with banks, financial institutions, and real estate developers to expand housing options for eligible workers.
Key Features of Tapera
Mandatory Contributions
Tapera mandates contributions from both employees and employers. Employees earning at or above the minimum wage are required to contribute 3% of their monthly salary, with employers chipping in the 0.5%. These contributions converge into a national fund, managed by BP Tapera (Badan Pengelola Tabungan Perumahan Rakyat).
Eligibility
Tapera casts a wide net, encompassing both formal and informal workers. Formal employees in both the public and private sectors are automatically enrolled. Self-employed or informal workers, however, have the autonomy to participate voluntarily.
Housing Assistance
Tapera’s raison d’être is to empower workers to secure housing through a range of financing options. These encompass loans for purchasing, constructing, or renovating homes. Workers who have diligently contributed to the fund for a minimum of 12 months are eligible to apply for these housing loans or financial aid.
Withdrawal of Funds
Accessing funds from Tapera accounts is governed by specific conditions, primarily retirement, the successful completion of housing purchases or renovations, or reaching the age of 58, at which point a worker may no longer be eligible. Should a worker retire without utilising the funds for housing, they retain the right to withdraw the entirety of their accumulated savings.
Targeted Beneficiaries
The program is primarily tailored to assist low-income workers, or “Masyarakat Berpenghasilan Rendah” (MBR), who often find it challenging to secure financing for housing. The government’s aspiration is to bridge the housing gap by offering affordable homeownership solutions for these workers.
How Tapera Works
- Contribution Process: Employers are mandated to deduct 3% of their employees’ salaries each month and channel these contributions into the Tapera fund. Subsequently, these contributions are deposited into individual Tapera accounts managed by BP Tapera, steadily accumulating over time as part of the collective national housing savings scheme.
- Investment of Funds: To ensure the fund’s vitality and growth, BP Tapera invests the collected contributions in secure financial instruments, including government bonds. The returns generated from these investments amplify the fund’s capacity to support housing projects and financing initiatives.
- Housing Financing: Upon fulfilling the minimum contribution period of 12 months, workers can apply for a variety of housing assistance programs through Tapera. These include:
- Procuring a new home
- Constructing a dwelling on owned land
- Renovating an existing residence
- Workers who meet the eligibility criteria can avail themselves of loans with reduced interest rates
The Ongoing Tapera Debate
While the Tapera program’s intent is noble, labour unions are up in arms over the mandatory contributions. They argue that these contributions are an additional financial strain on workers who are already feeling the pinch from existing deductions like BPJS and income tax, which together eat up a significant portion of their income. Adding the 3% Tapera contribution would only exacerbate the financial burden, especially for those on the lower rungs of the economic ladder.
The unions are not entirely against the idea of housing savings; rather, they advocate for Tapera contributions to be voluntary, allowing workers to opt in based on their financial capabilities. Additionally, they question the fairness of the system, pointing out that the government could tap into other revenue streams like increasing taxes on the affluent before squeezing more from those living paycheck to paycheck.
A Constitutional Battle
The unions have filed a request with the Constitutional Court to review three key articles within the Tapera Law. They argue that mandating Tapera contributions runs counter to the state’s responsibility to provide housing for its citizens without placing undue financial burdens on them.
The unions’ concerns extend beyond Tapera. They highlight that the cumulative effect of various mandatory contributions, such as those for BPJS, pensions, and now Tapera, significantly diminishes workers’ take-home pay. The idea of a “wealthy tax,” already implemented in many countries, has been proposed as an alternative to protect low-income workers from additional financial obligations.
The Constitutional Court is now tasked with reviewing the legality of the contested provisions and determining whether mandatory Tapera contributions are in line with the Indonesian Constitution. This decision will undoubtedly have far-reaching implications for workers and employers nationwide.
Prudent Steps for Indonesian Workers
While the legal challenge against the Tapera law continues, Indonesian workers are advised to remain vigilant and well-informed. As the saying goes, “forewarned is forearmed,” and understanding the potential implications of the court’s decision on their finances is crucial.
- Stay Abreast of Developments: Workers should keep their finger on the pulse of the Tapera proceedings in the Constitutional Court. Labour unions, advocacy groups and news portals are invaluable resources for timely updates and legal interpretations.
- Review Your Finances: With the future of Tapera hanging in the balance, workers are encouraged to take stock of their financial situation. Adjusting personal budgets to account for potential increases in deductions or exploring alternative financial solution for emergencies like Earned Wage Access (EWA) from Setlary could be a wise move.
- Seek Expert Counsel: If you’re worried about how Tapera could impact your rights and income, don’t hesitate to seek legal advice. Understanding your options can empower you to make informed decisions about your next steps.
While the Tapera program’s goal of promoting homeownership is well-intentioned, balancing that objective with the financial realities of workers is critical. Moving forward, it will be important to find a solution that addresses both housing needs and economic fairness. As the Tapera debate continues, consider Earned Wage Access (EWA) by Setlary to bridge the gap and take control of your financial future.
