Social Security Essay Sample

Social security is one of the cardinal constituents of labour public assistance. Labour public assistance refers to all such services. comfortss and installations to the employees that improves their on the job conditions every bit good as criterion of life. Social security benefits provided by an endeavor should protect non merely their employees but besides their household members through fiscal security including wellness attention. Social security envisages that the employees shall be protected against all types of societal hazards that may do undue adversities to them in carry throughing their basic demands. In India. proviso for societal security to the workers occupies a really of import topographic point in the industrial set up. It is included in our Fundamental law under the Directive Principles of State Policy. It therefore makes the ‘State’ bear the primary duty for developing an appropriate system for protecting and helping its work force.

Hence. a Social Security Division has been set up under the Ministry of Labour and Employment. The division trades with framing of societal security policy for the workers. disposal of all the statute laws associating to societal security and execution of the assorted societal security strategies. Social Security to the workers is provided through the five Cardinal Acts: – ( I ) The Employees’ State Insurance Act. 1948 ; ( two ) Employees’ Provident Funds & A ; Miscellaneous Provisions Act. 1952 ; ( three ) The Workmens’ Compensation Act ; ( four ) The Maternity Benefit Act ; and ( V ) The Payment of Gratuity Act. In add-on. there are a big figure of public assistance financess for certain specified sections of workers such as beedi workers. cine workers. building workers etc. The societal security bundle loosely covers two classs of labor public assistance steps: – ( I ) those associating to the medical installations. compensation benefits and insurance coverage to the employees ; ( two ) those associating to the provident fund and tip commissariats. It therefore consists of all types of preventative. promotional and protective steps for labor public assistance.

WHY DO WE NEED SOCIAL SECURITY
Social Security protects non merely the endorser but besides his/her full household by giving benefit bundles in fiscal security and wellness attention.
Social Security strategies are designed to vouch at least long-run nutriment to households when the earning member retires. dies or suffers a disablement. Thus the chief strength of the Social Security system is that it acts as a facilitator – it helps people to be after their ain hereafter through insurance and aid. The success of Social Security schemes nevertheless requires the active support and engagement of employees and employers. As a worker/employee. you are a beginning of Social Security protection for yourself and your household. As an employer you are responsible for supplying equal societal security coverage to all your workers. Background information on Social Security

India has ever had a Joint Family system that took attention of the societal security demands of all the members provided it had access/ownership of material assets like land. In maintaining with its cultural traditions. household members and relations have ever discharged a sense of shared duty towards one another. To the extent that the household has resources to pull upon. this is frequently the best alleviation for the particular demands and attention required by the elderly and those in hapless wellness. However with increasing migration. urbanisation and demographic alterations at that place has been a lessening in big household units. This is where the formal system of societal security additions importance. However. information and consciousness are the critical factors in widening the coverage of Social Security strategies. Social Security Benefits in India are Need-based i. e. the constituent of societal aid is more of import in the publicly-managed schemes-

In the Indian context. Social Security is a comprehensive attack designed to forestall want. guarantee the person of a basic minimal income for himself and his dependants and to protect the person from any uncertainnesss. The State bears the primary duty for developing appropriate system for supplying protection and aid to its work force. Social Security is progressively viewed as an built-in portion of the development procedure. It helps to make a more positive attitude to the challenge of globalisation and the attendant structural and technological alterations. Provident Fund

Provident fund is a fund that provides benefits to the employees of a company ( who are members of the fund ) . upon expiration of their employment. Both the employees and the employer are required to do parts to the fund in conformity with the preset rates. To go eligible for rank of the fund. a worker must hold completed one year’s uninterrupted service or have worked for 240 yearss during a period of 12 months. The employees have to lend at a certain rate of the basic pay. costliness allowance and retaining allowances. Similarly. employers besides contribute at the same rate. In India. the regulating Act associating to provident fund is the Employees’ Provident Funds & A ; Miscellaneous Provisions Act. 1952 ( EPF & A ; MP Act ) . It was enacted with the chief aim of doing some proviso for the hereafter of the industrial workers after their retirement and for their dependants in instance of decease. This Act applies to the whole India except Jammu & A ; Kashmir. It is applicable to every constitution which is engaged in any one or more of the industries specified in Schedule I of the Act or any activity notified by Cardinal Government in the Official Gazette and using 20 or more individuals.

The Act provides insurance to workers and their dependants against hazards of old age. retirement. discharge. retrenchment or decease of the workers. Soon. three strategies are in operation under the Act and are administered by theCentral Board of Trustees. The three strategies taken together supply to the employees an old age and survivorship benefits. a long term protection and security to the employee and after his decease to his household members. and timely progresss including progresss during illness and for the purchase/construction of a home house during the period of rank. These three strategies are as follows: – * Employees’ Provident Fund Scheme. 1952: – This seeks to supply fiscal security for employees in an constitution by supplying a system of mandatory nest eggs. The strategy covers employees acquiring rewards non transcending Rs. 6. 500 per month. The strategy takes attention of following demands of the members of the fund: – ( I ) Retirement ; ( two ) Medical Care ; ( three ) Housing ; ( four ) Family duty ; ( V ) Education of Children ; and ( six ) Financing of Insurance Polices.

However. a decease alleviation fund has been set up under the Employees’ Provident Fund Scheme to supply alleviation to the campaigners or inheritors of the asleep member. * Employees’ Deposit Linked Insurance Scheme. 1976: – The Cardinal Government with the motivation of supplying extra Social Security in the signifier of Life Insurance to the household of the asleep member of the Provident Fund. introduced the Employees Deposit Linked Insurance Scheme. Under it. on the decease of an employee. while in service. who is the member of the Employees’ Provident fund. the individuals entitled to have the provident fund accretions would be paid an extra sum equal to the mean balance in the provident fund history of the deceased during the predating 12 months. * Employees’ Pension Scheme. 1995 ( replacing the Employees’ Family Pension Scheme. 1971 ) : – A pension ( besides known as old-age pension ) is a retirement program intended to supply a individual with a unafraid income for life. It can besides be defined payments or benefits attributable to employees at the clip of retirement. during old age. at the clip of lasting disability or in the signifier of household pensions in instance of decease of the worker. etc.

The Employees Pension Scheme was introduced for the industrial workers wherein pension at the rate of 50 percent wage is collectible to the employees on retirement on completion of 33 old ages conducive service. A minimal 10 old ages service is required for entitlement to pension. In instance of decease of an employee. the strategy provides for grant of pension to household members on the footing of salary and service of the employee. The strategy was financed by deviating a part of the employers’ and employees’ part to the Employees Provident Funds with an extra part by the Cardinal Government.

The Employees’ Provident Funds & A ; Miscellaneous Provisions Act. 1952 ( EPF & A ; MP Act ) is administered by the Central and State Governments along with the Central Board of Trustees and Committees and Employees Provident Fund Organization ( EPFO ) . The Employees’ Provident Fund Organisation ( EPFO ) . India. is one of the largest provident fund establishments in the universe in footings of members and volume of fiscal minutess that it has been transporting on. It is an independent tripartite organic structure under the control of Ministry of Labour. Government of India with its caput office in New Delhi. The EPFO purposes to widen the range and quality of publically managed old-age income security plans through its consistent attempts and ever-improving criterions of conformity and benefit bringing system to its members. This manner it seeks to lend to the economic and societal wellbeing of the state.

Compensation

Compensation may be defined as the sum collectible by the employer to the employees for hurts sustained by them in the class of their employment. It covers the medical disbursals or any other disbursals incurred by the employees in the class of making the work-related activities. Compensations are normally paid either as base wage and/or as a variable wage. The ‘base pay’ implies that the sum of compensation is based on the function played by an employee in the organisation and in the market demoing the expertness required to carry on that function. Under it. all retiral benefits like old-age pension. provident fund. tip and house rent allowances are proportionate to basic wage. Whereas ‘variable pay’ means that the sum of compensation is based on the public presentation assessment of an employee in that function. that is. how good they accomplish their ends. In India. the jurisprudence regulating the commissariats of compensation is th vitamin E Workmen’s Compensation Act. 1923 ( WC Act ) . The Act is administered by State Governments through Commissioners for Workmen’s Compensation.

The Act provides for the compensation to the workingman or his household in instances of employment related hurts ensuing in decease or disablement. It includes individuals employed in mills. mines. plantation. automatically propelled vehicles. building plants and certain other risky businesss. The sum of compensation to be paid depends on the nature of the hurt and the mean monthly rewards and age of workingmans. The minimal and maximal rates of compensation collectible for decease ( in such instances it is paid to the dependants of workingmans ) and for disablement have been fixed and is capable to alteration from clip to clip. The Workmen’s Compensation Act. 1923 was amended by the Workmen’s Compensation ( Amendment ) Act. 2000. Under this amendment. the workingmans or their household members will acquire the compensation money at the enhanced rate if they die or acquire handicapped. Many insurance companies have besides designed certain policies associating to compensation insurance.

For illustration: – Workmen’s Compensation Insurance by United India Insurance Company Limited. : – Under it an employer is required to pay compensation to his workers who receive hurts or contract occupational diseases during the class of their work. Such compensation is collectible under the Workmen’s Compensation Act. An employer may obtain an insurance policy to cover such liability. The premiums are collectible normally on the footing of rewards. It is besides known as ‘Employers’ Liability Insurance’ . This policy provides insurance against the undermentioned hazards: – * Indemnity to see against his liability as an ‘employer’ to inadvertent hurts ( including fatal ) sustained by the ‘workman’ whilst at work. * On excess premium-medical. surgical. and hospital disbursals including the cost of conveyance to hospital for inadvertent employment hurts. * Liability in regard of diseases mentioned under the Workmen’s Compensation Act. on extra premium. which arise out of and in the class of employment.

Gratuity

Gratuity is a ball amount payment made to the employees based on the continuance of their entire service. The tip benefit is collectible on surcease of employment ( either by surrender. decease. retirement or expiration. etc ) by taking the last drawn wage as the footing for the computation. However. in instance of decease of the employee. his/her household members are given the sum. It is a signifier of gratitude provided to the employees in pecuniary footings for the services rendered by them to the administration and is an of import signifier of societal security benefit. Gratuity payment liability of the employer tends to increase with a addition in the wage and term of office of employment. The employer may pay the tip returns from his current gross. Some administrations have besides set up a tip fund as a portion of their fiscal planning. Besides. many insurance companies have designed particular strategies which relate to tip. For illustration. LIC ( Life Insurance Corporation of India ) has Group Gratuity ( Cash Accumulation ) Scheme that provides convenient manner of funding statutory duty of an employer under thepayment of tip Act. The jurisprudence regulating tip in India. is the Payment of Gratuity Act. 1972 ( P. G. Act ) .

The Act applies to mills. mines. oil Fieldss. plantations. ports. railroads. motor conveyance projects. companies. stores or other constitutions. The commissariats under the Act are: – * Employers are statutorily apt to pay sum of tip equivalent to 15 yearss of last drawn basic wage. It becomes collectible to the employees who have completed five old ages of uninterrupted services in an administration. After five old ages. if workers work more than 6 months but less than a twelvemonth. so it is calculated as another one twelvemonth. But if they work less than 6 months after five old ages. so it will non be considered as another twelvemonth. For calculating tip. figure of working yearss in a month are considered 26 yearss. This is to done to supply benefit to the employees as it increases the sum of tip to be paid. The last drawn basic wage is divided by 26. The sum so obtained is multiplied by 15 to calculate the sum of tip per twelvemonth. * The tip received upto the bound of Rs. 3. 50. 000 is apt to be exempted from revenue enhancement under the Income Tax Act.

The freedom is. nevertheless. non available for payment of tip when the employee is still in service. Gratuity received from a old employer is to be pooled with tip received from the present employer for calculating freedom bound. * In instance of any other employee. non covered under the Act. the tip received by an employee on retirement. decease. expiration. surrender or on his going helpless anterior to his retirement is exempt from revenue enhancement to the extent of the least of the followers: – i. Rs. 3. 50. 000 two. Gratuity really received. or three. Half month’s wage for each completed twelvemonth of service. Average Salary is calculated on the footing of mean wage of 10 months instantly continuing the month in which an employee is retired. The wage for the intent is calculated as basic salary plus dearness allowance plus committee on fixed per centum of net income. * Since the tip is a statutory service status. the Act provides for the penalty of the employer who fails to pay it to an employee. Furthermore. in instance of misconduct of the employee affecting fiscal loss to the direction. an sum equal to the loss straight suffered by the employer by ground of such misconduct is apt to be forfeited from the tip due to the employee.

Insurance

Insurance may be defined as a contract in composing under which one party agrees to indemnify the other party against a loss or harm suffered by it on history of an unsure hereafter. in return for a consideration called ‘premium’ . The person/business who gets its life/property insured is called ‘Insured/Assured’ . The bureau which helps in come ining into an insurance agreement is called ‘Insurer’ or ‘Insurance company’ . The understanding or contract which is put in authorship. is called a ‘policy’ . Insurance screen for the employees of a company is an of import facet of societal security benefits bundle. It includes insurance policies associating to medical benefits. compensation to worker’s every bit good as provident financess. Consequently. many insurance companies have designed certain policies which provide such insurance screen to the employees. For illustration: – * Workmen’s Compensation Insurance by United India Insurance Company Limited. : – Under it an employer is required to pay compensation to his workers who receive hurts or contract occupational diseases during the class of their work. Such compensation is collectible under the Workmen’s Compensation Act. An employer may obtain an insurance policy to cover such liability. The premiums are collectible normally on the footing of rewards. It is besides known as ‘Employers’ Liability Insurance’ .

This policy provides insurance against the undermentioned hazards: – * Indemnity to see against his liability as an ‘employer’ to inadvertent hurts ( including fatal ) sustained by the ‘workman’ whilst at work. * On excess premium-medical. surgical. and hospital disbursals including the cost of conveyance to hospital for inadvertent employment hurts. * Liability in regard of diseases mentioned under the Workmen’s Compensation Act. on extra premium. which arise out of and in the class of employment. Similarly. Employers’ Liability Policy is provided by the New India Assurance Company Limited. Their policy covers statutory liability of an employer for the decease of or bodily hurts or occupational diseases sustained by the workingmans originating out of and in class of employment. The Government of India has enacted the Employees’ State Insurance Act. 1948 ( ESI Act ) which relates to employee insurance. The Act envisages an integrated demand based societal insurance strategy that would protect the involvement of workers in eventualities such as illness. pregnancy. impermanent or lasting physical disability. decease due to employment hurt ensuing in loss of rewards or gaining capacity.

The Act besides guarantees moderately good medical attention to workers and their immediate dependents. The Act provides several societal security benefits which include medical benefits. pregnancy benefits. etc. The Act further absolved the employers of their duties under theMaternity Benefit Act. 1961 and Workmen’s Compensation Act 1923. The insurance strategy under the Act is tailored to accommodate the wellness insurance demands of workers supplying full medical installations to the insured individuals and their dependents. The Cardinal Government has set up the Employees’ State Insurance Corporation ( ESIC ) to administrate the strategies under the ESI Act. It is the prime Social Security Organization in the state.

The corporation comprises members stand foring Central and State Governments. Employers. Employees. Parliament and the medical profession. The maps of the Corporation are to supply medical attention and intervention. hard currency benefits during illness. pregnancy and employment hurt and pension for dependants on the decease of the workers due to employment hurt. There is besides an of import Cardinal Government Employees’ Group Insurance Scheme ( CGEGIS ) which provides the Cardinal Government employees with the two fold benefit: – ( I ) insurance screen to assist their households and ( two ) ball sum payment to augment their resources on retirement. All the employees’ who had entered Cardinal Government Service after 1st November. 1980 are obligatorily covered under the strategy from the day of the month it came into force i. e. from 1st January. 1982.

Medical

Medical refers to the wellness attention installations provided by a concern endeavor to its employees in instance of their illness. accident or diseases. The wellness attention installations may include a proper agreement for the intervention of the employees and their dependants. on free or concessional rates. The administrations may supply for regular medical check-ups of its employees. atleast once a twelvemonth. The employees may besides be provided with: – ( I ) medical allowances ; ( two ) reimbursement of medical disbursals: ( three ) medical leave. etc. The Centre organises installations for wellness attention of its employees and pensionaries populating in the capital and other major metropoliss through Cardinal Government Health Scheme and public Hospitals. The medical installations under the strategy are available to all the employees paid from the civil estimations and their household members shacking in the country covered by the strategy. An employee can choose out of the strategy and help of the medical installations provided by the employer of his partner. If an employee or a member of his household covered under the Scheme falls ailment at a topographic point non covered under CGHS. the intervention shall be admissible under Central Services ( Medical Attendance ) Rules. 1944.

These Rules are applicable to all authorities servants other than ( one ) those in Railway Service. and ( two ) those of non-gazetted rank stationed in or go throughing through Kolkata. whose conditions of service are prescribed by regulations made or deemed to hold been made by the Cardinal Government. when they are on responsibility. go forth or foreign service in India or when under suspension. Medical installations of a company besides include the pregnancy benefits provided to the adult females employees. Consequently. the Maternity Benefit Act. 1961 ( M. B. Act ) was enacted to supply medical installations to pregnant adult females employees. The Act purposes to accomplish uniformity in affairs associating to pregnancy protection and applies to all mills. mines and plantations. except to those on whom the Employees’ State Insurance Act. 1948applies. The Act provides that pregnant adult females workers should non be dismissed and discharged during the period of pregnancy leave. It contains commissariats for: – ( I ) payment of hard currency pregnancy benefit to the adult females employees for certain periods before and after child birth: ( two ) 12 hebdomads pregnancy leave ; medical fillip and certain other benefits. The Act is administered by both the Central and State Governments.

Since. entree to good medical attention is normally rather expensive and involves immense costs. employers may besides supply medical insurance to their employees. Many insurance companies have besides designed certain policies which provide medical insurance screen to the employees. For illustration: – * Workmen’s Compensation Insurance by United India Insurance Company Limited. : – Under it an employer is required to pay compensation to his workers who receive hurts or contract occupational diseases during the class of their work. Such compensation is collectible under the Workmen’s Compensation Act. An employer may obtain an insurance policy to cover such liability. The premiums are collectible normally on the footing of rewards. It is besides known as ‘Employers’ Liability Insurance’ .

This policy provides insurance against the undermentioned hazards: – * Indemnity to see against his liability as an ‘employer’ to inadvertent hurts ( including fatal ) sustained by the ‘workman’ whilst at work. * On excess premium-medical. surgical. and hospital disbursals including the cost of conveyance to hospital for inadvertent employment hurts. * Liability in regard of diseases mentioned under the Workmen’s Compensation Act. on extra premium. which arise out of and in the class of employment. Similarly. Employers’ Liability Policy is provided by the New India Assurance Company Limited. Their policy covers statutory liability of an employer for the decease of or bodily hurts or occupational diseases sustained by the workingmans originating out of and in class of employment. A safe work environment and a healthy work force play a really of import function in constructing the foundation of a successful concern administration.