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Tapera: Mandatory Public Housing Savings Spark Controversy and Speculation


On 20 May 2024, the Indonesian government introduced Regulation Number 21 of 2024 (“GR 21/2024”), an amendment to existing Regulation Number 25 of 2020 regarding the implementation of public housing savings, known as Tabungan Perumahan Rakyat (“Tapera”). The program mandates contributions to Tapera for all workers, including those in private enterprises and self-employed individuals, leading to criticism from various sectors. This article delves into the Tapera program, public reactions to its compulsory participation policy, and potential future developments.

What is Tapera?

Tapera is a government-sponsored housing savings fund with mandatory contributions, governed by Law Number 4 of 2016 on Public Housing Savings. This initiative aims to address the housing backlog and provide financing solutions for low-income citizens. By fostering a community effort, Tapera seeks broad participation to alleviate the strain on the limited state budget.

The program essentially operates by collecting contributions from participants and investing a portion of these funds, either offering loans to low-income individuals or returning the savings at the end of the participation period.

Participants include workers and self-employed individuals aged 20 years or more, or those who are married. Participation is mandatory for those earning at least the minimum wage, including foreign workers employed in Indonesia for more than six months. Employers are obligated to register their employees by 20 May 2027, ensuring compliance with the regulation. On the other hand, self-employed individuals must register themselves. Self-employed individuals earning below the minimum wage have the option to participate voluntarily, allowing them to take advantage of the program’s benefits at their discretion.

How It Works

Employers are required to pay 0.5% and to collect 2.5% from their employees’ payroll, amounting to a total of 3% of employees’ salary. Self-employed individuals must contribute the entire 3% themselves. These contributions are managed and invested by Custodian Banks and Investment Managers, under the watchful eyes of the Financial Services Authority (OJK) and BP Tapera. Investments are made in secure and profitable ventures, such as bank deposits, government bonds, and housing-related securities, ensuring both safety and returns.

Eligible participants, after a minimum membership period of 12 months and at least one year of work, can avail themselves of loans for their first home. This includes options for purchasing, building, or renovating a home. These loans, with a maximum term of 30 years, offer favorable conditions, such as adequate loan limits and low interest rates not exceeding 5% per annum. Currently, 37 banks, including state-owned, private, and regional banks, facilitate Tapera loans, thereby ensuring wide accessibility.

Upon termination of membership, either due to retirement at age 58, death, or failure to meet eligibility criteria for five consecutive years, participants receive a lump sum settlement of their account, including accrued interest. This provision aims to ensure that participants can exit the program with a nest egg, providing financial security in their later years.

Reactions from Various Social Groups

The mandatory nature of Tapera also comes with sanctions for violators, including employers who fail to register employees, collect and deposit contributions, or update employee data. Sanctions include written warnings, administrative penalties, publication of violations, and potential suspension or revocation of business licenses.

The implementation of this mandatory program has sparked considerable opposition from various groups. Timboel Siregar, the Coordinator of the Social Security Advocacy Group (BPJS Watch), has called for a voluntary participation model, especially targeting employees in the private sector, state-owned enterprises, and regional enterprises. 1 The Indonesian Employers Association (APINDO) also voiced their discontent on the grounds that a similar program already exists. They propose utilizing the Additional Benefit Service (MLT) program, which offers housing financing through the Old-Age Security program (JHT) managed by BPJS Ketenagakerjaan. 2

Labor unions, including the Labor Party and the Confederation of Indonesian Trade Unions (KSPI), have also voiced their discontent. They plan protests against the mandate, urging the government to reconsider or scrap the Tapera program altogether. 3

In response to the backlash, Coordinating Economic Affairs Minister, Airlangga Hartarto, has promised a review of the mandatory participation requirement. This review aims to address the concerns raised by stakeholders, ensuring the policy aligns better with their needs and circumstances. 4

We are of the view that this review will calm the waters and provide a more balanced approach to the program’s implementation as it is essentially a case “where there’s smoke, there’s fire”. Thus, government’s prompt response will be crucial in quelling the growing discontent.

What to Anticipate

GR 21/2024 allows for adjustments to the Tapera contribution percentages, providing some leeway for future modifications. Given the strong reactions from various social groups, the government may issue follow-up policies to address the concerns and improve the program’s acceptance and effectiveness. Possible adjustments could include making the program voluntary or integrating it more seamlessly with existing social security schemes to lighten the load on both employers and employees.

That being said, while Tapera aims to offer a sustainable solution to Indonesia’s housing challenges, its mandatory nature has ignited much debate. The government’s response to these concerns will be pivotal in shaping the future of this ambitious housing savings program. Whether Tapera will stand the test of time or face significant hurdles hinges on how effectively these issues are addressed. We believe that time will tell how the government responds to these reactions.


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