Introduction
Social Security is defined as the protection or security that is provided by a community to its members, ensuring that they have proper access to healthcare and a surety of a steady and regular income, especially during unemployment or post-retirement phases. It is classified as a basic human right by the United Nations. It is a benefaction-based system that supports sureties in case of unemployment, health issues, and pensions.
Since the beginning of civilization, humans have faced numerous economic breakdowns due to pandemics, natural disasters, and even unemployment. These breakdowns are a big threat to the economy even in the 21st century. Through time we have seen that economic breakdowns have been predicted before they occurred, and hence the community as a whole started to create securities in form of food, finances, and even cattle, to be able to provide themselves with the security of a basic rightful living. With the advancement of times, and a formal specification of human rights, kingdoms and governments started to support the social security of their people, for ensuring a rightful living.
Types of Securities
- Traditional- Securities that are provided through friends and relatives, assets, work, or donation-driven charities are traditional securities or sureties.
- Modern- With the advancement in socio-economic status and development of cities, different organizations came up to provide their members with various economic sureties. Organizations, governments, and so on are modern types of security providers.
Beginning of ‘Social Security‘
With the discovery of the Americas, the English colonialists in the early 1600s brought with them their laws to set up a suitable system of governance. These laws were mostly based on providing support for the poor based on the taxes collected. But with the rise in slavery at the same time as they arrived, the lawmakers discriminated against the poor slaves from the poor whites. The slaves were regarded as undeserving of any support. During this era, the support that was provided was done in the most appalling way to discourage people from using it. People who used these services had their assets confiscated, and lost their voting and free movement privileges.
With the end of the American Civil War and after the confederacy surrendered and joined the Union, the then U.S. Government introduced a pension for the disabled Union veterans of the war, widows, and children of the soldiers who died during the war, on the other hand, the Confederate soldiers created and funded their own pension system. The pension for the Union soldiers depended upon the type of disability and their military rank, the lowest pension was $8 per month for a totally disabled private (lowest rank in the military). With the passage of the Dependent and Disability Pension Act in 1890 by the U.S. Congress, the earlier pension system was changed, and the veteran and other eligible people for pension received a lump sum amount of pension for the time between leaving the military and applying for a pension. Therefore, the Civil War Pensions can be classified as the first official Social Security system introduced.
International Labour Convention on Social Security 1952
In 1952, the International Labour Convention, an agency under the United Nations, stipulated the minimum standards of social security that should be provided. It is the only international instrument that supports basic social security support. These nine basic supports are-
- Medical Care
- Sickness Benefits
- Unemployment Benefits
- Old Age Benefits
- Employment Injury Benefits
- Family Benefits
- Maternity Benefits
- Invalidism Benefits
- Survivor’s Benefits.
Social Security in India
The Indian social security system has been developed using the western example and systems that prevailed in modern industries. With the pressure and urges from social reformers, business leaders, and welfare organizations, social security was introduced in India and became the responsibility of the state to provide for the social security of the citizens of the country, as per Article 43 of the Indian Constitution. Numerous schemes and programs prevail through various laws and regulations in India, yet only a smaller section of the Indian masses receive the security provided by the government.
Policy for Social Security in India
- National Provident Funds
- Universal Social Security Schemes
- Employers Liability Schemes
- Insurance based on Resources and Beneficiaries Pooling Risks
Benefits to Workmen in India
1. Pension – In India, there are provisions for provident funds for employees engaged in corporations and are overseen by the Employees’ Provident Fund Organization, established within the Ministry of Labour and Employment. Schemes under the provident fund organization apply to all businesses with over 20 employees, and contribution to these funds is mandatory to be followed by the firms as well as the employees if they make INR 15,000 a month, while it is voluntary if they make more than that amount. Schemes provided under the Employees’ Provident Fund Organizations-
- The Employees’ Provident Fund Scheme, 1952– This is contributed by the employer and the employee. The employer contributes from 1.63% up to 3.67%, whereas the employee contributed from 10% to 12%.
- The Employees’ Pension Scheme, 1955– This is contributed by the employer and the government. The employer contributes 8.33%, whereas the government contributes 1.16%.
- The Employees’ Deposit Linked Insurance Scheme, 1976– Under this scheme, only the employer contributes 0.5%. Neither the employee nor the government contributes any amount. The pensions that are offered are- 1) Pension for Disability or Superannuation, 2) Pension for Military Widows, 3) Pension for Children and 4) Pension for Orphans.
2. Medical Benefit and Insurance – With the lack of universal healthcare in India, i.e., no free healthcare for the Indian masses and to provide the funds to ensure proper medical care to employees and their families; the government implemented the Employees’ State Insurance Act 1948. It also made available monthly cash benefits in phases of sicknesses, pregnancy, and in cases of deaths or injuries to employees in organizations with at least 10 employees. The monthly coverage was extended to all employees that made less than INR 21,000 a month under the Employees’ State Insurance (Central) Amendment Act, 2016. Maternity benefits were also improved under this Act.
3. Benefit for Disability – Employers have been mandated to compensate employees and their families in case of injuries or death at the workplace under the Employees’ Compensation Act, 1923. Seclude I part I and II of the Employees’ Compensation Act provide for injuries that include partial or permanent disablement, while Section III, Part A, B, and C provide for Occupational diseases. Compensation for disabilities suffered due to employment is estimated as below;
- In the case of permanent disability; 60% of the monthly wage is multiplied by the age of the disabled, or an amount of INR 90,000, whichever is more.
- In case of death; 50% of the monthly wage multiplied by the age of the deceased or an amount of INR 80,000, whichever is more.
4. Benefit for Maternity – For women, maternity leave in India is a paid maternity leave that lasts up to 26 weeks for the first two children and 12 weeks for the third child, as enforced through the Maternity Benefit (Amendment) Act, 2017. This Act also provides for maternity leave for women who have adopted a child less than 3 months as well as for mothers who underwent surrogacy. Every woman is entitled to receive the average daily wage during the timespan of the maternity leave and a medical bonus of INR 3,500, as per the maternity Benefit Act, 1961. A 6-week paid maternity leave is also applicable in cases of miscarriage, and a month of paid leave due to medical complications.
5. Gratuity – A corporation with at least 10 employees must support an added 15 days of wages to those employees who have worked for at least 5 years with the firm. It is a cash benefit provided by the firm to the employee as a lump sum. However, payment of gratuity can be refused if the employee has been terminated due to misconduct. The formula to calculate gratuity is (15 X last drawn salary X years of service) ÷ 30.
Conclusion
Social Security is an important instrument in supporting a sustainable life for all people in need of such support, and to feel accepted at the workplace. Irrespective of whether a person is above the poverty line or not, Social Security should be provided to all citizens and eligible non-citizens. It is not a free money handout from the government, it is the social support that provides for the better living standards of people in the community, so there are no disruptions in the peaceful continuance of society. With the legislation brought abroad and in India, the governments have ensured that their people do not suffer or are not being taken advantage of by corporations. Maternity long and paid leave for women and provident fund are some of the policies that have been updated every few years to keep up with the changing thought environment of the people. With such dynamic upliftment, the interest of the employer and the employee are considered equal with the core focus on the joint satisfaction and interest of both.
References
- Facts on Social Security, International Labour Organization, https://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/documents/publication/wcms_067588.pdf.
- Civil War Pensions, Centre for Civil War studies, Virginia Tech https://www.essentialcivilwarcurriculum.com/civil-war-pensions.html.
- Civil War Pensions and Disability, Ohio State Law Journal Vol 62:109.
- Employees’ State Insurance Act, 1948.
- The Workmen Compensation Act, 1923.
- Social Security (Minimum Standards) Convention, 1952 (No. 102).
This article is written by Namay Khanna, a 3rd year BBA LLB (Hons.) student at Symbiosis Law School, Pune.