Social Security

By Dr SnehalModerator Dr Ramesh Pawar

Framework

• History• Definition• Need of social security • Approaches to social security• Social security acts in India• Social Security Scheme in India

– Social security scheme for organized sector– Social security Scheme for unorganized sector

• New Initiatives by govt.• NGO involved in Social security• Social security in Maharashtra • Social security in developed countries

History

• Before Industrial revolution• Families bore the primary duty of protecting members against starvation &

destitution. • Relief of distress by social organizations outside the family was a matter of

charity. • There was no conception of social assistance as a right.• "Poor laws" adopted in countries.

• The Industrial Revolution (1750)• Workers and their families were completely dependent for their livelihood

on the regular payment of wages• Large numbers of laborers were frequently unemployed for long periods

without any form of insurance.• Families often ended up living in slums in unsanitary and impoverished

conditions• To protect the urban working classes from destitution, certain protective

systems were gradually developed

History cont….

• 1883 -1889- First broad system of social insurance established by German Chancellor Bismarck

• 1930- Social insurance spread to Latin America, the United States and Canada

• 1911- Contributory system of unemployment insurance introduced in Britain.

• 1919 International Labour Organisation (ILO) established. India becomes one of the permanent, non elective and founding members among the ten industrially important countries. It has Convention No. 102 on Social Security.

• 1935- Social Security Act introduced in USA to meet the risks of old age, death, disability and unemployment. The main emphasis to promote the security of workers through social insurance

History cont…..• 1923 - Workmen's compensation act• 1948 - Employees' state insurance • 1952 - Employees' provident funds, with

amendments• 1972- Payment of gratuity• 1976 -Employees' deposit-linked insurance• 1995 - Employees' pension scheme• 1995 -National social assistance program • 2007- National Social Security Bill

Definition of social security

• The protection which society provides for its members through a series of public measure, against the economic and social distress that otherwise would be caused by the stoppage or substantial reduction of earning resulting from sickness, maternity, employment injury, unemployment, invalidity, old age and death (ILO,1984)

 Why do we need social security?

• Social Security protects not just the subscriber but also entire family by giving benefit packages in financial security and health care.

• Social Security schemes are designed to guarantee at least long-term sustenance to families when the earning member retires, dies or suffers a disability.

• Thus the main strength of the Social Security system is that it acts as a facilitator - it helps people to plan their own future through insurance and assistance.

• Thus, social security is a comprehensive approach designed to prevent deprivation, assure the individual of a basic minimum income for himself and his dependents and to protect the individual from any uncertainties.

• The success of Social Security schemes however requires the active support and involvement of employees and employers.

Who needs social security?

The common problems during which one needs support are • Old age

• Marriage

• Maternity

• Sickness

• Invalidity

• Employment Injury

• Death

Principles of Social Security

• Universality- Coverage of whole population

• Comprehensiveness- Coverage of maximum contingencies

• Benefit should be adequate and appropriate

• Benefits should be secure and non-discriminatory

• Transparent and sound administration

• A strong role for the social partners.  

• Tripartite Administration- Contribution by employee, employer, state

Approaches to social securitySocial Assistance Social Insurance

Non-contributory Financed by contributions

Receives benefits either in cash or in-kind in the form of food aid

Worker is actively involved in economic planning for his future

Involves a feeling of charity, sympathy Inculcates a sense of responsibility for future planning

Designed to supplement the incomes of particularly vulnerable groups (elderly and dis abled)

Provide for various contingencies that interrupt or stop earnings

Example: •National old age pension scheme•National family benefit scheme•National maternity benefit scheme

Example: •ESI scheme•Contributory provident fund scheme•LIC schemes

Social security acts in India• Directive Principles of State Policy 1. Article 41- Right to work, to education and to public assistance in certain cases

• State shall within the limits of its economic capacity, it will make effective provision for securing the right to work and to educate and to assistance in case of unemployment, old age, sickness, disablement.

2. Article 42 -Provision for just and humane conditions of work and for maternity relief

• State has the responsibility to provide for just and humane conditions of work and for maternity relief.

• The State bears the primary responsibility for developing appropriate system for providing protection and assistance to its workforce. However, information and awareness are the vital factors in widening the coverage of Social Security schemes.

Workforce in India

Total workforce - 459 million 1.In organized sectors - 26 million 2.In unorganized sectors - 433 million Composition of workforce in organized sectorPublic Sector -- 18 millionPrivate sector -- 8.46 million

94

4 2workforce

organized unorganized Public Private

SOCIAL SECURITY FOR ORGANISED SECTOR• The organized sector includes primarily those establishments which are covered by

the Factories Act, 1948, • The Shops and Commercial Establishments Acts of State Governments, the

Industrial Employment Standing Orders Act, 1946 etc. • This sector already has a structure through which social security benefits are

extended to workers covered under these legislations.

• Main organization providing social security to organized sector are:                       •           A.Employees’ State Insurance Corporation (ESIC)

• B.Employees’ Provident Fund Organisation (EPFO)

• A. Employees’ State Insurance Corporation (ESIC)

• Implementation of Employees’ State Insurance Act, 1948, which provides for medical care and treatment to insured persons and their families.

• Providing assistance in terms of benefits during sickness and maternity, compensation for employment injury, pensions for dependants on the death of workers due to employment injury, etc. to employees covered under the ESIC Act.

• Social Security to the workers in the Organized Sector is provided through Central Acts

• ESI Act, • EPF & MP Act,• Workmen’s’ Compensation Act, • Maternity Benefit Act,• Payment of Gratuity Act. • Factories act 1948• Minimum wages act

Employees’ State Insurance Scheme : Employees: 4.75% of wages, Employers: 1.75% of wages, State governments 12.5 %1) Medical Benefit : Full medical care is provided to an Insured person and his family

members. Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs.120/-

2) Sickness Benefit : In the form of cash compensation at the rate of 70 per cent of wages, for a max of 91 days in a year. Worker is required to contribute for 78 days in 6 months.

• Extended Sickness Benefit :Extended upto 2 years in the case of 34 malignant and long-term diseases at rate of 80 per cent of wages.

• Enhanced Sickness Benefit:3) Maternity Benefit  :  4) Disablement Benefit :• Temporary disablement benefit : In case of employment injury. - 90% of wage.• Permanent disablement benefit : 90% of wage in the form of monthly payment

depending upon the extent of loss of earning capacity

Employees’ State Insurance Scheme :

5) Dependants' Benefit : At the rate of 90% of wage in the form of monthly payment. Death occurs due to employment injury or occupational hazards.

Other Benefits : • Funeral Expenses : An amount of Rs.10,000/- • Confinement Expenses : If confinement occurs at a place where necessary medical

facilities under ESI Scheme are not available. • Vocational Rehabilitation :To permanently disabled Insured Person for undergoing

VR Training at VRS.• Physical Rehabilitation : In case of physical disablement due to employment injury. • Old Age Medical Care :For Insured Person retiring on attaining the age of

superannuation or under VRS/ERS and person having to leave service due to permanent disability insured person & spouse on payment of Rs. 120/- per annum.

The various benefits available are

• Family welfare services• Immunization services• HIV and AIDS control services• Outpatients, inpatients, emergency medical services• Diagnostic laboratory and radiological services• Antenatal, natal and post natal services• Occupational health services• Super specialty services including specialized investigations• Physical and vocational rehabilitation• Ambulance services• Health education ,• Artificial aids and appliances such as spectacles, dentures, hearing aids,

artificial limbs etc.• Drugs and dressings

Employee’s Provident Funds and Miscellaneous Provisions Act, 1952

Responsible for:Administration of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.Implementation of the schemes of Provident Fund, Family Pension and Deposit Linked Insurance for the benefit of the workers covered under the scheme.Administration of Employees’ Pension Scheme, 1995

The Payment of Gratuity Act, 1972 The Act provides for a scheme of compulsory payment of gratuity to employees engaged in factories, mines, oil fields, plantations, ports, railway companies, motor transport undertakings, shops or other establishments.

The Maternity Benefit Act, 1961 Enacted to promote the welfare of working women.Maximum period for which a woman can get maternity benefit is twelve weeks. Of this, six weeks must be taken prior to the date of delivery of the child and six weeks immediately following that date.

The Works men’s Compensation Act, 1923

The main objective of the Act is to impose an obligation upon the employers to pay compensation to workers for accidents arising out of and in course of employment.

.The Factories Act, 1948 Regulates the working conditions in the factories Ensures that basic minimum requirements for the safety, Health and welfare of the factory workers are provided. The Act also envisages regulating the working hours, leave, holidays, overtime, employment of children, women and young persons.

MINIMUM WAGES ACT

To safeguard the interests of the workers engaged in unorganized sector who are vulnerable to exploitation due to illiteracy and lack of bargaining power. The Act binds the employers to pay the minimum wages to the workers as fixed under the law and workers get protected against exploitation.

Central Govt. Health Scheme Components of the Scheme are

Dispensary services F. W. & M.C.H. ServicesSpecialists consultation facilities Polyclinic and hospital XRay,ECG Laboratory Examinations. Hospitalization.Organization for the purchase, storage, distribution and supply of medicines and other requirements.Health Education to beneficiaries.

Benificiaries

All Central Govt. Servants pensioners drawing pension from Civil Estimates and their family members Hon'ble Members of ParliamentHon'ble Judges of Supreme Court of IndiaEx Members of ParliamentEmployees & Pensioners of Autonomous Bodies covered under CGHS (Delhi) Ex Governors and ExVice PresidentsFormer Prime MinistersFormer Judges of Hon'ble Supreme Court of India and Hon'ble High Courts Freedom Fighters

• SOCIAL SECURITY FOR UNORGANISED SECTORIntroduction

• The unorganized sector workers are those who have not been able to pursue their common interests due to constraints like casual nature of employment, invariably absence of definite employer-employee relationship, ignorance, illiteracy, etc.

• The unorganized workers are also generally low paid and a majority of them are devoid of any of the social security benefits like life and medical insurance, health care, maternity benefits, and old age pension etc.

Unorganised Sector• Characteristics of Unorganised Sector

The unorganized sector workers can be categorised broadly into four categories

• (i) Occupation: Small and marginal farmers, landless agricultural

labourers, share croppers, fishermen, those engaged in animal husbandry, beedi workers,building and construction workers, etc.

• (ii) Nature of Employment: Attached agricultural labourers, bonded labourers migrant workers, contract and casual labourers

• (iii) Specially distressed categories: Scavengers, carriers of head loads, drivers of animal driven vehicles, loaders and unloaders

• (iv) Service categories: Midwives, domestic workers, fishermen ,barbers, vegetable and fruit vendors, newspapers vendors etc

The existing social security arrangements in the unorganised sector

Central Legislations including Welfare Funds• The Mica Mines Labour Welfare Fund Act (1946),• The Lime Stone and Dolomite Mines Labour Welfare Fund Act (1972),• The Iron Ore, Manganese Ore and Chrome Ore Mines Labour Welfare Fund Act

(1976),• The Beedi Workers Welfare Fund Act (1976), and• The Cine Workers Welfare Fund Act (1981).   Social assistance through welfare funds of Central • National Old Age Pension Scheme (NOAPS): • Swarnajayanti Gram Swarozgar Yojana (SGSY)• Sampoorna Grameen Rozgar Yojana (SGRY)• Indira Awas Yojana (IAY)

Social insurance schemes• Janshree Bima Yojana (JBY):• Universal Health Insurance Scheme (UHIS):

Social security for workers (Unorganized sector)

• Schemes:– Varishtha Pension Bima Yojana (VPBY)

– Sanjay Gandhi Niradhar Anudhan Yojana, 1980

– Sanjay Gandhi Swawavlamban Yojana 1980

– Unorganised sector worker’s social security scheme

– National rural employment guarantee scheme

– Rashtriya Swasthya Bima Yojana

Social security for workers (Unorganized sector)

Scheme Eligibility Fund Benefit

Varishtha Pension Bima Yojana(2003-04)

Indian Citizens aged 55 years and above

Only Single Premium is payable

•Monthly Pension- Rs 250-2000• Loan facility available

National rural employment guarantee scheme (2005)

Any adult member volunteer to do unskilled work

Government aided scheme

Atleast 100 days of guaranteed wage employment in every financial year to every household

National social assistance program(1995)

Needy elderly persons and poor households on the death of the primary breadwinner.

Employee-NoneEmployer-NoneGovernment-100%

•National Old Age Pension Scheme•National Family Benefit Scheme •National Maternity Benefit Scheme

Unorganized Sector Social Security Scheme (2004)

•Voluntary•Age 36-50yrs•Monthly income < Rs 6500

Income related and flat rate

Triple Benefit-•Pension scheme•Personal Accident Insurance•Medical Insurance

Unorganized Sector Workers Social Security Bill, 2008

• Establishment of National Social Security Advisory Board and State Social Security Advisory Boards

• Benefits shall be admissible to all persons above 14 years of age• Persons are provided with an identity card in the form of a smart card. • 11 schemes including the AABY and the Health Insurance Scheme for

Unorganized Sector BPL workers.• Benefits:

– life and disability cover, – health and maternity benefits,– old age protection, provident fund, – employment injury benefits, – Provision of housing, educational schemes for children, skill upgradation

of workers, funeral assistance, and old age homes.

Aam Admi Bima Yojana, 2007

• State Government will be the Nodal Agency. • Members of All Rural Landless Households, in the age group of 18–59

years will be eligible. • Premium of Rs 200 per member will be borne by the Centre and

States equally. • A sum of Rs 30000 in case of natural death and Rs 75000 in case of

accidental death will be payable.• A compensation of Rs 75000 will be payable in case of total

permanent disability and of Rs 37500 in case of partial permanent disability.

• Provision for the payment of a scholarship of Rs 300 per quarter per child for two children of the beneficiaries studying in 9th to 12th standard for its beneficiaries.

Rashtriya Swasthaya Bima Yojana

• A transparent scheme that lists the entitlements, administered through a smart card obviating the need for out of pocket expenses • Covers all BPL unorganized sector workers and their families (of five

members),• a smart card will be issued• Beneficiary will be required to pay Rs 30 per annum as registration/ renewal

fee.• Prescribed premium of Rs 750 per member-family will be borne by the

Central and State Governments in the ratio of 75:25.• Benefits

– cashless attendance to all covered ailments; – Hospitalization expenses, taking care of most common illnesses, – all pre-existing diseases to be covered, – transportation costs subject to prescribed limits payable to the

beneficiary.

Janashree Bima Yojana

• Earlier Social Security Group Insurance Scheme was available for persons in the age group of 18 to 60 years belonging to unorganized sector

• Janashree Bima Yojana provides insurance cover of Rs 20000 in case of natural death, Rs 50000 in case of death or total permanent disability due to an accident, and Rs 25000 in case of partial disability

• Premium is Rs 200 per beneficiary ( 50% of the from the ‘Social Security Fund’ and 50% contributed by the beneficiary/State Government/nodal agency)

• Eligibility criteria: – Persons in the age group of 18 to 60 years – Living below or marginally above the poverty line

Life Insurance Corporation• LIC of India is the only public sector Life Insurance Company in India. • The company was established in September 1956 and is Head Quartered

in Mumbai, India which is under taking by Government of India.• It is the largest life insurance company in India with a huge presence in

both rural and urban markets.

• It is the top most leading and famous public sector life insurance company in India.

• It provides many different types of lic policy to customer needs. More than 200 insurance companies are established in India.

• Main objective of is to spread this insurance products all over India particularly in rural areas and economically background classes and to provide financial insurance covers against death at low premium.

Rajiv Gandhi Jeevandayee Arogya Yojana (RGJAY)• OBJECTIVE: To improve access of Below Poverty Line (BPL) and Above

Poverty Line (APL) families (excluding White Card Holders as defined by Civil Supplies Department) to quality medical care for identified speciality services requiring hospitalization for surgeries and therapies or consultations through an identified Network of health care providers.

• SCHEME:• The insurance policy/coverage under the RGJAY can be availed by

eligible beneficiary families residing in all the 35 districts of Maharashtra.

• BENEFITS: The scheme entails around 971 surgeries/therapies/procedures along with 121 follow up packages in following 30 identified specialized categories.

New initiatives by govt

Pradhan Mantri Jan-Dhan Yojana

• Various financial services like availability of savings bank account, access to need based credit, remittances facility, insurance and pension to the excluded sections i.e. weaker sections & low income groups.

• Approach to bring about comprehensive financial inclusion of all the households.

• Envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit, insurance and pension facility.

• Also an effort is being made to reach out to the youth to participate.

PRADHAN MANTRI SURAKSHA BIMA YOJANA

• Yearly scheme,• Accident Insurance Scheme offering accidental death and disability

cover for death or disability on account of an accident.• All savings bank account holders in the age 18 to 70 years in

participating banks• Death Rs. 2 Lakh.• Total and irrecoverable loss of both eyes or loss of use of both

hands or feet or loss of sight of one eye and loss of use of hand or foot Rs. 2 Lakh

• Total and irrecoverable loss of sight of one eye or loss of use of one hand or foot Rs. 1 Lakh

NGO involved in Social security Self-Employed Women’s Association (SEWA):

• SEWA a women’s organization, is promoting social security through the formation of co-operatives.

• It aims to provide need based services to the women on demand and on payment of affordable charges.

Working Women Forum (WWF):

• The Working Women’s Forum India (WWF) selects and trains women cadres from the poorer neighbourhood communities to perform marketable skills in the field of health care to the poor as advocates at the grassroots.

•

NGO …..

KHOJ FOUNDATION (An Education program for street Children)

• To enable the children on streets to express their thoughts in writing and comprehend the meaning of what they read

• To empower the children to explore things in their own right and make decisions which are in harmony with themselves and the society at large.

• To enable children to earn their livelihood with d ignity by developing skills, abilities and talents to better support themselves and their families. Promote volunteerism and a sense of social responsibility amongst people towards the life of the children on streets.

• Social Security in developed country• Most social security systems are linked to wage employment. • Social security schemes exist side by side with various private

arrangements made by people to protect themselves against certain contingencies. These include private savings, private insurance and pension funds.

• Characteristics: • i) Existence of universal social security system • ii) Problem of exit rate from the workplace being higher than the

replacement rate. • iii) Most of the workforce is in the organized sector hence a

system of pay roll deduction is difficult to apply.

Challenges • Migration — 30 million workers in India are constantly on the move (migrant

labour).

• Political support is limited in certain areas.

• Inadequate laws and legislation.

• The poor are unable or unwilling to take up health insurance because of its cost,

or lack of perceived benefits

• Financial constraints — unorganised workers are low-wage earners.

• Gender specific work — women are excluded in most trades in the unorganised

sector.

References

• Park K. Park’s Textbook of Preventive and social medicine. 23rd edition. Bannout publication; Jabalpur: 2015. p.702.

• Social Security Online . The Official Website of The U.S Social Security Administration [Online]. [cited 2016 Jan 20]; Available from: URL: http://www.socialsecurity.gov/

• International Labour Organization [Online]. [cited 2016 Jan 9]; Available from: URL:http:// www.ilo.org/

• Government of India. Ministry of Labour [Online]. [cited 2016 Jan 6]; Available from: URL:http://www.labour.nic.in

• Ministry of Rural Development (GOI) [Online]. [cited 2016 Jan 11]; Available from: URL:http://www.rural.nic.in

• Overview G. Ministry of Labour and Employment , Government of India. 2016;1–9. • Policy H, Premium S, Payment O, Is W, Nav LIC. About LIC – Life Insurance

Corporation of India LIC of India Profile. 2016;1–17. • THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS

PROVISIONS ACT, 1952 (Act No. 19 of 1952) 4. 1952;1952(19). • Cghs A, Links R, The S, Govt C, Scheme H, Beneficiaries C, et al. About CGHS.

2016;20–1.