social Insurance concept and its application

It helps to understand concept and application of social insurance

1. SOCIAL SECURITY in India

2. Framework Definitions of social security Concept of Social Securities Need of social security Mile Stones In Social Securities Types of social security Social Security in India Organized sector Unorganized sector New Initiatives by govt.

3. Social Security India has always had a joint family system that took care of social security needs of all members. Social Securities can be provided by Institutional and non Institutional agencies. India is a good example of having non-institutional form of social security measures in the world. its own social security system- because of Self sufficient village economy, Cast System, Joint Family System and organization of charity. It had a religious backing also.

4. How did it all start?

5. Concept of Social Security Social security systems ensure the minimum level of living to the needy by public assistance, and they also promote public health and social welfare. Social security has a powerful impact at all levels of society. It provides workers and their families with access to health care and with protection against loss of income  It provides older people with income security in their retirement years For employers and enterprises, social security helps maintain stable labor relations and a productive workforce

6. Why We Need of Social Security Most of the rural and informal sector workers in the world do not have any social security measures. In India almost 90% of families earn their livelihood from the unorganized sector. Needs that necessitates social security : Physical risks: Sickness, old age, maternity, accidents, death. Economic risks : Unemployment Economic burden of larger family

7. Social Security is the need of the hour To guarantee at least long-term sustenance to families when the earning member retires, dies or suffers a disability. Help people to plan their own future through insurance and assistance. To prevent deprivation, assure the individual of a basic minimum income for himself and his dependents and to protect the individual from any uncertainties To protect entire family (dependents) by giving benefit packages in financial security and health care.

8. Social Security systems : They play three roles Deal with factors that cause needy circumstances Minimum level of living Promote public health and social welfare.

9. Types of social security : social security is of two types   Social assistance : A method to provide benefits to persons usually for the vulnerable groups of community ( Children, mothers, disabled, old age people etc.) from general revenues of the state, it is non-contributory. Social insurance : A method to provide benefits to person through contributions of beneficiaries with contribution/subsidies from employer and state.

10. . SOCIAL ASSISTANCE SOCIAL INSURANCE Non-contributory Financed by contributions Receive benefits either in cash or in-kind ( 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 dis­abled) 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

11. 1923 1926 1936 1948 1948

12. 1948 1952 1961 1961 1965

13. 1970 1972 1976 1986 2013

14. Social security in India Organised sector – defined as workers who are having a direct regular employer-employee relationship within a organization Unorganised sector – 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.

15. The Acts : Social Security issues mentioned in concurrent list Item no 23 : Social Security and Insurance , Employment and unemployment Item No 24 : Welfare of labour Working condition Provident fund Employer lability Workman’s compensation Old age pension Maternity benefits

16. The Directive Principles of State Policy

17. Social Security measure In India: Scheme for Organised Sector Includes establishments covered by the Factories Act, 1948, the Shops and Commercial Establishments Acts of the States, Industrial Employment Standing Orders Act, 1946, etc. It has a structure through which social security benefits are extended to workers Provided through following acts: ESI Act, EPF & MP Act, Workmen’s’ Compensation Act, Maternity Benefit Act, Payment of Gratuity Act. Factories act Minimum wages act

18. Scheme for organised sector : Employees’ State Insurance Act, 1948 Medical Sickness Disablement Dependants benefit Other Full medical care is provided to an insured person and his family. 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/- 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. Temporary disablement : in case of employment injury. - 90% of wage. Permanent disablement : 90% of wage in the form of monthly payment depending upon the extent of loss of earning capacity Death occurs due to employment injury or occupational hazards 90% of wage in the form of monthly payment.. Funeral expenses : an amount of rs.10,000/-   Vocational rehabilitation Physical rehabilitation : in case of physical disablement due to employment injury.  Old age medical care

19. The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 (EPF & MP Act) Basically meant for security of workers after their retirement. It provides for lump sum payment of provident fund, monthly pension and deposit linked insurance. Covers 187 specific scheduled factories and establishments employing 20 or more employees The Employees’ Provident Fund & Miscellaneous Provisions (Amendment) Act, 1996 : was made on 16 th Nov 1995, : for the word family pension fund “ the Word Pension Fund” shall be substituted

20. The Workmen’s Compensation Act, 1923 Act takes care of two contingencies namely disablement due to employment injury and death due to employment injury. A lump sum compensation amount is paid to the disabled worker or the dependants as the case may be during both the contingencies. The Workmen’s Compensation Act is not applicable to those workers who are covered by the ESI Act.

21. Maternity benefit act, 1961 Extends to the whole of India Entitled for paid holidays not exceeding 12 weeks in the case of maternity and during this period they are eligible to receive full wages. Woman should have worked for period of not less than 160 days in the 12 months immediately preceding the date of her expected delivery Maternity Benefits (Amendment)Act, 2017 : 27 th March 2017 In the principal Act, in section 5,— (A) in sub-section (3)— ( i ) for the words ‘‘twelve weeks of which not more than six weeks’’, the words ‘‘twenty-six weeks of which not more than eight weeks’’ shall be substituted. ‘‘Provided that the maximum period entitled to maternity benefit by a woman having two or more than two surviving children shall be twelve weeks of which not more than six weeks shall precede the date of her expected delivery;’’;

22. Payment of Gratuity Act, 1972 Provides 15 days wages for each year of service to employees who have worked for five years or more Payable on - Superannuation Retirement or resignation Death or disablement due to accident or disease Payment of wage (Amendment) Act, 2017 : 28 th Dec 2016, Changes in Section 6 of Payment wage Act 1936, All Wage Shall be paid in current coin, cheque or by crediting to bank account of the employee

23. Minimum wages Act To promote welfare of workers by fixing min rates of wages in certain industries because in many industries where labor is not organised. To prevent exploitation of workers Minimum wages has to be paid without any deductions Payment of wages less than minimum wages on the ground of performance or output is illegal Working hours should not exceed more than 48 hrs/week with a holiday Not more than 9 hrs/day with 1 hr rest in between If person works more than 48hr/week than extra hrs are considered overtime and overtime payment is double the wage

24. Unorganised Sector 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 . 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.

25. Category of Unorganised Sector : Occupation : Small and marginal farmers, landless agricultural labourers, fishermen, those engaged in animal husbandry, beedi workers, building and construction workers, etc. Nature of Employment : Attached agricultural labourers, bonded labourers migrant workers, contract and casual labourers Specially distressed categories : Scavengers, carriers of head loads, drivers of animal driven vehicles, loaders and unloaders Service categories : Midwives, domestic workers, fishermen ,barbers, vegetable and fruit vendors, newspapers vendors etc

26. Scheme for unorganised 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-none Employer-none Government-100% Old age pension scheme Family benefit scheme 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

27. Unorganized Workers Social Security Bill, 2008 Ministry of labour & Employment has enacted the Unorganised workers social security Act,2008. Govt of India has approved a proposal for convergence of 3 major social Security Scheme for Unorganised workers on a single smart card platform – RSBY, AABY, IGNOAPS for old age protection

28. Unorganised Sector Rashtriya Swasthya Bima Yojana, 2008 Initially designed to target only the BPL households, but has been expanded to cover - Building and other construction workers, Licensed Railway Porters , Street Vendors, Beedi Workers , Domestic Workers, Mine Workers, Rickshaw pullers, Rag pickers, Auto/Taxi Driver and MNREGA Workers, Covers all BPL unorganized sector workers and their families (of five member ) 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.

29. Unorganised sector : Janashree Bima Yojana, 2008, 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

30. Mahatma Jyotiba Phule Jan Arogya Yojna (MJPJY) earlier know as Rajiv Gandhi Jeevandayee Arogya Yojana ( RGJAY ) OBJECTIVE: To improve access of BPL and APL 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.

31. Newer Initiatives : Pradhanmantri Jan Dhan Yojana To ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner. Under the scheme: Account holders will be provided zero-balance bank account After Six months of opening of the bank account, holders can avail ₹5,000 overdraft from the bank. A person can transfer funds, check balance through a normal phone which was earlier limited only to smart phones so far.

32. Social Insurance Schemes

33. The Way ahead Policy and laws must be framed in such a way that they are mostly concentrated for benefits of unorganized workforce. Public should made aware about the social security schemes. Effort should be made for public private partnership.