Compulsory finance scheme for Indonesian maids

A new bank scheme that is compulsory for newly arriving Indonesian maids will give them greater control of their own finances, while their employers will no longer have to foot large sums of money to pay agents on their behalf.

The Household Service Workers Industry Scheme (HIS) is part of the Indonesian government's efforts to improve the treatment of its citizens who work overseas as domestic workers.

Details were announced by the Association of Employment Agencies (Singapore) (AEAS) yesterday. It signed an agreement with Indonesia's National Agency for the Placement and Protection of Indonesian Migrant Workers in February to work together on the plan.

Under the new scheme, an Indonesian domestic worker will take up a personal loan of about $1,700 from Maybank Indonesia to cover the cost of training, passport applications, medical checks and placement fees for the Indonesian agencies, AEAS president K. Jayaprema said. This currently can cost up to $3,600, and is usually paid for first by the Singapore employer. Helpers then repay them by taking a salary cut for several months.

The new framework requires a domestic helper to use the finance scheme to apply for an identity card to work overseas, said Ms Jayaprema. On arriving in Singapore, her employer will credit her full salary every month into her local Maybank account, from which she will repay the loan, with interest, over eight months.

She will also pay a separate service fee to the Singapore agency - which will now be capped at $1,000 - in instalments of, say, $50 a month, over 20 months. Maids must also not be charged a transfer fee if they change employers, and Indonesian domestic workers must be paid a minimum salary of $550.

Saying the scheme was about transparency, Ms Jayaprema said helpers would be able to take charge of their lives and manage their own finances. "Employers, too, don't need to fork out thousands of dollars for the placement fees and costs upfront."

AEAS has been conducting training in recent months for local agents to learn the new scheme.

Agents who have attended the day-long training course, costing $650 for association members, can apply for certification to show they are following the scheme.

So far, 89 agencies have been certified, and the first workers using the bank finance scheme are scheduled to arrive here next week, said Ms Jayaprema.

AEAS will also be setting up a mediation centre to oversee issues with HIS, recruitment agreements and contracts.

Indonesian Embassy counsellor Didit Parlambang said he is waiting for details from the Indonesian government on the implementation of the new system. "But the goal is good, to protect the workers," he said.

A version of this article appeared in the print edition of The Straits Times on June 24, 2016, with the headline 'Compulsory finance scheme for Indonesian maids'. Print Edition | Subscribe