Malaysia’s Employment Insurance System (EIS), also known as Sistem Insurans Pekerjaan (SIP) or Lindung Kerjaya will introduce enhanced benefits effective 1 October 2026. These changes provide stronger financial support, mobility assistance, and training support to eligible contributors who experience a qualifying loss of employment.
What Is Changing from 1 October 2026?
Four major SIP benefit enhancements have been announced:
Enhancement 1 of 4: Early Re-employment Allowance: 25% → 50%
The Early Re-employment Allowance rewards EIS recipients who return to work before exhausting their Job Search Allowance entitlement.
Before: 25% of the remaining unpaid Job Search Allowance
From 1 October 2026, 50% of the remaining unpaid Job Search Allowance
This significantly increases the financial incentive for eligible recipients who secure employment early. Actual entitlement remains subject to PERKESO’s eligibility requirements.
Enhancement 2 of 4: New RM1,000 Mobility Assistance Allowance
A new Mobility Assistance Allowance will be introduced under SIP. Eligible contributors who secure new employment located more than 100 kilometres from their place of residence may qualify for a one-off payment.
The benefit helps workers manage costs associated with accepting employment further from home. Eligibility is subject to PERKESO’s applicable conditions.
Enhancement 3 of 4 : Training Support Is Being Increased to RM30 Per Day
Eligible EIS recipients who participate in approved training currently receive a training allowance of between RM10 and RM20 per day, depending on the applicable conditions. From 1 October 2026, the Training Allowance will be increased to a flat rate of RM30 per day.
The amendment is intended to provide additional financial support to workers undertaking reskilling or upskilling while searching for new employment.
Enhancement 4 of 4: Training Fee Support Increased to RM7,000
The maximum training fee that may be funded under EIS will also increase. Currently, eligible training fees are funded up to: RM4,000
From 1 October 2026, the maximum will increase to: RM7,000
The higher limit provides greater scope for eligible workers to participate in more comprehensive reskilling and upskilling programmes. The increase from RM4,000 to RM7,000 was specifically discussed in Parliament as part of the amendments.
Up to RM25,000. What Does It Actually Mean?
PERKESO announced that eligible contributors may receive total support of up to RM25,000. This does not mean every contributor will automatically receive RM25,000 in cash.
PERKESO describes this amount as the potential overall support and protection available to eligible contributors under the enhanced system. The actual amount received will depend on factors such as:
- Qualifying loss of employment
- Contribution history and insured wage
- Applicable Job Search Allowance
- Training participation and early re-employment eligibility
- Mobility assistance eligibility
Employees will continue to be subject to PERKESO’s eligibility and claims requirements under the Employment Insurance System.
Who Can Claim EIS Benefits?
EIS is designed primarily to assist insured workers who experience a qualifying loss of employment.
PERKESO’s current guidance states that an insured person must generally:
- apply within 60 days from the date of loss of employment;
- satisfy the required contribution conditions;
- meet the definition of loss of employment under the Employment Insurance System Act; and
- participate in applicable re-employment and job-search requirements.
Examples of circumstances that may qualify include retrenchment, VSS/MSS and certain business closures, while situations such as voluntary resignation, retirement and dismissal due to misconduct are generally excluded.
Eligibility for individual benefits remains subject to PERKESO’s assessment and the applicable provisions of the law.
Are EIS Contribution Rates Increasing on 1 October 2026?
Based on the information officially published by PERKESO as at 21 September 2026, the announced benefit enhancement should not be confused with an increase in the EIS contribution rate.
PERKESO currently states that the EIS contribution rate is:
- Employer: 0.2%
- Employee: 0.2%
- Total: 0.4%
The contribution is calculated according to the contribution schedule under Act 800 and is subject to the applicable insured wage ceiling.
The 1 October 2026 announcement concerns enhancements to EIS/SIP benefits and employment support, rather than an announced increase in the 0.2% employer and 0.2% employee contribution rates.
Why Are These Changes Important?
The changes represent a significant expansion of the support available to workers after a qualifying loss of employment.
The revised structure places greater emphasis not only on temporary income support but also on helping affected workers return to employment.
In practical terms, the amendments provide:
- a stronger financial incentive to return to work early;
- support for workers accepting jobs further away from home;
- higher daily financial assistance while attending approved training; and
- a larger training budget for reskilling and upskilling.
This reflects the broader role of EIS as both an income protection scheme and an employment transition programme.
Official References:
PERKESO — Official announcement on the enhanced SIP benefits PERKESO announced on 19 September 2026 that the enhancements will take effect from 1 October 2026. PERKESO Official Announcement
PERKESO — Employment Insurance / LINDUNG KERJAYA Official information on EIS eligibility, claims and existing benefits. PERKESO LINDUNG KERJAYA
