Rupak D Sharma

The government has designed social security schemes for employees of the formal sector, under which workers who contribute as little as Rs 500 per annum will be entitled to sick, maternity and workplace injury benefits worth thousands of rupees every year.

The schemes were designed by the state-owned Social Security Fund (SSF) to assuage burden of employees who lose earnings for remaining absent from workplace because of illness, pregnancy and accidents that occur at place of work.

“These schemes are insurance packages that will cover certain portion of earnings of workers even if they fail to work,” SSF Director General Kebal Prasad Bhandari told Republica. “These schemes will now be presented before high-ranking officials of the Ministry of Finance to get feedback.”

Earlier in January, the SSF had appointed Peace and Development Studies through bidding to design social security schemes on sick, maternity and workplace accident benefits for workers.

These schemes, once approved, will initially apply to employees working in the formal sector throughout the country, according to the SSF. “Gradually, those working in the informal sector and self-employed people will be roped into the program.”

As per the schemes, workers who remain sick for more than three days and cannot attend workplace will get compensation equivalent to 70 percent of basic salary for a period of up to three months.

However, workers who earn a basic salary of less than Rs 10,000 per month will not be entitled to compensation of more than Rs 20,000, while those receiving basic salary of more than Rs 20,000 per month cannot demand more than Rs 50,000 in compensation.

These payments are topped with special diagnosis allowances of Rs 3,000 twice a year.

“But if the employee continues to remain sick for more than three months, compensation will be provided for additional one-month period upon approval extended by a medical committee under the SSF,” an SSF consultant told Republica, adding, workers will not be allowed to lay claim to three-month compensation package more than twice a year.

Under the maternity benefit scheme designed by the SSF, working mothers will get compensation equivalent to 50 percent of their basic salaries for a period of up to three months.

But working mothers who earn basic salary of less than Rs 10,000 will not be eligible for benefit exceeding Rs 15,000 and those earning more than Rs 20,000 in basic salary will not be entitled to benefit of more than Rs 35,000. Working mothers will also be extended a child grant of Rs 2,000 upon successful delivery.

“These compensations and grants will be extended to working mothers twice in their working life,” the SSF consultant said.

But in case of maternal death, one-time compensation of Rs 100,000 will be extended to the family of the deceased. And in case of still birth Rs 1,500 will be provided in compensation.

Similarly, miscarriages that occur in one to four months of pregnancy will draw compensation equivalent to 15 days of basic salary, while miscarriages that occur in over four-month-old pregnancies can extract compensation equivalent to one month of basic salary.

“However, no compensation will be provided for abortion cases,” the consultant said.

Another scheme designed by the SSF to cover workplace injury or accident also includes compensation equivalent to 50 percent of the basic salary for a period of up to three months. In case of major injury, hospital expenses of additional Rs 5,000 will be provided to employees.

However, in case of death of an employee at the workplace, basis salary of at least 24 months or a minimum of Rs 250,000 and a maximum of Rs 400,000 will be offered to the family of the deceased.

Similarly, in case of permanent full disability, like paralysis of the entire body, 24 months of basis salary will be provided.

“If the full disability continues for more than 2 years, the benefit package can be extended by one more year, under which compensation will have to be born equally by the SSF and the employer,” the consultant said. “But in case of permanent partial disability, like amputation of arms or legs, compensation equivalent to 36 months of basic salary will be extended to employees.”

The SSF has currently envisaged launching these schemes by raising funds from both employees and employers.

Currently, employees are making contribution of one percent of their basic salary -- that does not attract income tax -- to the SSF. Later, the SSF plans to make it mandatory for employees and employers to contribute 10 percent of the basic salary of workers each to run social security programs.

This way the SSF plans to raise 21 percent of the basic salary of workers to run the fund, of which, five percent of the basic salary of workers will be used to run social security schemes, another 10 percent will go to pension fund and the remaining six percent to savings accounts in Citizens Investment Trust and Employees Provident Fund.

The SSF is also expecting contribution of another 10 percent of basic salary of workers from the government, which is yet to be finalized.

The SSF is planning to request all employers to make their part of contribution regularly as employees may not be eligible for sick and maternity benefits if they have not made 12 months of contribution in the past 15-month period.

“However, in the case of workplace injury or accident benefit, employees will be eligible for compensation soon after enrolment in the program,” the SSF consultant said.

Published on: 4 May 2013 | Republica