Social Security

Legislations By Omkar J Bapat

 Topic 01: Social
Security
(Part 01inofIndia
05)
By Omkar J Bapat
Definition of Social
Security
Aims and objectives
of Social Security
Social Assistance
Social Insurance
Introduction
 What is Social Security
Social security is a system of assistance from the State for the
people to aid and enable them to maintain the minimum
standards of wholesome and cultured living.

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 means the systems by which the State enables every
citizen to lead a worthy life as a member of a cultured society.
Social security systems provide countermeasures against the
causes for needy circumstances including illness, injury,
childbirth, disablement, death, old age, unemployment and other
Concept and definition
of
Social security
 Security
Concept of Social security:

In general sense, social security refers to protection provided by

the society and the State to its members against providential
mishaps over which a person has no control.

The underlying philosophy of social security is that the State shall

make itself responsible for ensuring a minimum standard of
material welfare to all its citizens on a basis wide enough to cover
all the main contingencies of life.

Social security is primarily an instrument of social and economic

justice.
 Security
Social security as a concept has been in place in different forms and
types. We have learnt in history about the examples of the kings and
emperors of the past who had issued orders and created systems
for the guaranteed provision of the bare basic minimum needs,
aides and means for survival for their citizens and subjects in their
respective domains.

The word 'Security' originates from the Latin word 'securus' which
means 'liberation of uneasiness'. In other words, social security
means the provision of a means and mechanism promising
liberation from uneasiness, risks or threats to life. Security can be
interpreted as a situation where one feels safe and protected away
from the hazards and threats to life.
 Security
The systems of social security in the nations of the world seek to
provide a system that acts as a castle or a fort, a system that
guarantees protection for the citizens from the risks and hazards
of life.

social security is ensured through social systems, by means of

legislative action involving the coercive power of the state and by
means of voluntary effort for the purpose of the creation of these
systems, ensuring the benefit of all the people who are covered and
protected under it.
 Security
Social security systems play the following three roles:

First, the systems deal with the factors that may cause needy
circumstances such as illness, injury, childbirth, old age,
disablement, and unemployment by providing economic security
through insurance (social insurance) or by direct public spending
(social assistance).

Second, the systems ensure the minimum level of living to the

needy by implementing public assistance programs.

Third, in line with the aforementioned measures, the systems

promote public health and social welfare.
 Security
Definitions of Social security:

1) The noted British Economist, Lord Beveridge has defined social

security as an 'attack on five giants - want, disease, ignorance,
squalor and idleness'.

2) Weber and Cohen state that 'social security is a dynamic

subject with various facets namely - philosophical, theoretical,
humanitarian, financial, administrative, social, economic, political,
statistical, acturial, medical and legal'.
 Security
3) The 'Father' of social security, Chancellor Otto Von Bismarck
has voiced his opinion on social security as 'The policy of the state
should cultivate the view also among the propertyless classes of
the population, those who are the most numerous and the least
educated, that the state is not only an institution of necessity but
also one of welfare. By recognizable and direct advantages they
must be led to look upon the state not as an agency devised
solely for the protection of the better-situated classes of society but
also as one serving their needs and interests.',
 Security
4) Professor Walter Friedlander an expert in the field of Social
Welfare has defined social security as 'a programme of protection
provided by the society against the contingencies of modern life
- sickness, unemployment, old age, dependency, industrial accidents
and invalidism against which an individual cannot be expected to
protect himself and his family by his own ability or foresight'.

5) Article 22 of the Universal Declaration of Human Rights

speaks the following on social security - 'Everyone, as a member
of society, has the right to social security and is entitled to
realization, through national effort and international co-operation
and in accordance with the organization and resources of each State,
of the economic, social and cultural rights indispensable for his
 Security
6) The International Labor Organization has defined social
security as 'the protection that a society provides to individuals
and households to ensure access to health care and to guarantee
income security, particularly in cases of old age, unemployment,
sickness, invalidity, work injury, maternity or loss of a
breadwinner.’
Aims and Objectives
Aims and Objectives of Social Security
Aim of Social security:

The aim of social security is threefold - Compensation,

Restoration and Prevention.

1) The idea of compensation is based on the fact that there should

be security of income and the individual and his family should not
suffer the dual impact of destitution and loss of life, limb, health
and work.

2) Restoration implies that there must be a provision for enabling

and delivering to the individual and his family, medicine and
treatment for sickness and illnesses and re-employment and
Aims and Objectives of Social Security
3) The purpose of prevention is stated as the means and mechanism
for ensuring that the productive capacity of the individual is not lost
due to sickness, unemployment, invalidity, idleness and disease,
thereby rendering the person to be in a state wherein he can increase
his material productivity, intellectual capacity thereby improving
the moral well being of the community.
Aims and Objectives of Social Security
Objectives of Social security:

(i) To ensure that no individual is not denied access to social

security, the access to which is his fundamental right as a member
of the society.

(ii) To ensure that all individuals are given confidence through

which they must be sure that their level of living and quality of life
will be adversely affected due to any mishaps and contingencies.

(iii) To ensure that all individuals are able to enjoy completion in

the quality of working and personal life in each aspect.
Aims and Objectives of Social Security
(iv) To promote the idea of social security as a 'wise investment'
that motivates the employees, boosts their morale and paves the
way for higher production.

(v) To ensure the provision of economic and social justice for all the
members of the society through the means of Social Security

(vi) To act as a driver ensuring the adoption of schemes for ensuring

employment, insurance and reduction and elimination of
unemployment through a drive for rational planning and industrial
development.

(vii) To establish ways and means for the provision of pension

Aims and Objectives of Social Security
(viii) To emphasize the provision of coverage for additional risks
other than sickness, maturity and employment injuries.

(ix) To see to it that cash benefits are given to workers and

employees suffering from injuries which have rendered them to lose
their ability to use their limbs and other organs and parts by a partial
capacity, which is permanent.

(x) The main objective of social security is to ensure that a citizen

who has contributed or is likely to contribute to his country’s
welfare should be given protection against certain hazards of life.

(xi) It emphasize and ensures that the ideas of human dignity and
SCOpe of Social security
 Scope of Social security
The International Labor Organization (ILO) has defined the scope
of Social security into nine components vide its Convention No.
102 issued in 1952.

This Convention does not present any rigid guidelines or

objectives and gives the ratifying countries the flexibility to
decide for themselves, the actual wordings of the scope of Social
security within the meaning of the nine components of the
Convention, specific to the condition of labor, developmental level
and other situations specific to their territories.

The member countries realize the nine components of the scope

of Social security by means of creation of universal schemes;
 Scope of Social security
Nine Components of the Scope of Social security:

(i) Medical care: Social security under medical care covers general
illnesses and ailments. With reference to women employees it
covers the their specific needs, with reference to the above and also
includes provisions for pre-natal and post-natal care in case of
pregnancies along with other necessary provisions such as
practitioner care, specialist care, provision of medicines and
hospitalization.

(ii) Sickness Benefit: Sickness includes incapability to work

resulting a loss of earning. This benefit covers the period spent by
the worker for recuperation and the duration of the payments of
 Scope of Social security
(iii) Unemployment Benefit: This benefit seeks to cover the loss of
earning during a worker’s unemployed period when he is capable
and available for work but remains unemployed because of lack of
suitable employment, subject to a duration of time decreed as the
limit for this benefit by the employer or by the Government.

(iv) Old Age Benefit: Under this benefit the quantum of payment
depends upon on individuals working capacity during the period
before retirement. It further includes a certain amount beyond a
prescribed age and continues till one’s death.
 Scope of Social security
(v) Employment Injury Benefit: Under Employment Injury
benefit proper medical care and periodical payment are made to
injured employee as per the legal provisions of Worker’s
compensation Act, 1923. In these days industrial work is subject to
different kind of contingencies mishaps and occupational diseases
which are covered under employment injury benefit of social
security.

It may include (a) Morbid condition (b) Inability to work (c) Due to
Morbid condition may lead to suspension of earning (d) Total or
partial loss of earning capacity. (e) Death of the bread earner in
family.
 Scope of Social security
(vi) Maternity Benefit: This benefit is provided by the Maternity
Benefit Act 1961, which provides for a benefit during the period of
pregnancy including medical aid.

The Act provides for payment of maternity benefit to the expecting

mother for the prenatal and post natal duration period of pregnancy
along with grant of absence from work for 26 weeks as per the
Maternity Benefit (Amendment) Act 2016.

(vii) Family Benefit: In case of death of the bread earner the

responsibility for maintenance of the surviving family members can
be enabled by way of a monetary benefit receivable under this head
as per the rules and regulations of the employer and the regulating
 Scope of Social security
(viii) Survivor’s benefit: It refers to the benefits payable to the
affected family in form of periodical payments following the death
of its bread earner and is provided for the entire duration of
contingency.

(ix) Invalidism benefit: This benefit begins with the provision of a

monetary provision to the affected person who is unable to find
work on grounds of invalidity. This benefit is connected with the
age of the person and seeks to provide aid for the person and his
family when he or she approaches the twilight period of life,
wherein this benefit changes into old age benefit for the person.
This benefit is payable in form of a periodical payment that covers
the needs of the affected person and his family in their time of need.
SOCIAL ASSISTANCE
 Social assistance
Access to social security is a fundamental right, embodied in the
Universal Declaration of Human Rights adopted by the United
Nations General Assembly in 1984 and has been ratified by many
nations in their legal systems in the world.

According to the Supreme Court of India, the Fundamental Right

to Life also includes the Right to Livelihood as an inherent part
of the Fundamental Rights guaranteed to all the citizens of India.
Thus we can state that the right to social security is also a part of the
right to life.
 Social assistance
There are two main 'currents' in the movement towards social
security - Social assistance and Social insurance.

Both of them are designed to serve the end objective although they
may differ with reference to form, evolutionary process and
approach and form an integral part of the social security system of a
country.
 Social assistance
Social assistance represents the unilateral obligation of the
community towards its dependent groups and is provided by
the State by means of revenue gained from taxation and other
legally sanctioned ways of collection of money and is used for the
purpose of alleviation of the problems of the poor and the needy
people in the country.

Social assistance includes the benefits which are provided by the

Government without any contribution from the citizens,
workers and employers. Workmen’s compensation, maternity
benefits, old age pensions, etc. are the examples of social
assistance.
 Social assistance
The International Labor Organization (ILO) has defined Social
assistance as ‘a service or scheme which provides benefits to
persons of small means as of might in amount sufficient to meet
standards and requirements of need and financed from taxation.’

Social assistance schemes are funded from the State's revenue

instead of the individual's own contributions with the statutory
scales of benefit adjusted according to a person's means.

The purpose of Social assistance schemes is to aid and enable

people who are eligible to receive the assistance in financial
difficulties to rise above their problems in life.
 Social assistance
Principal features of Social assistance:

1) Social Assistance programmes and schemes are financed by the

State and local government bodies using the revenues gathered by
way of taxation.

2) The State has a legal obligation to pay the benefits of the Social
assistance schemes to the people deemed as eligible to receive it, in
line with the prescribed categories of needs.

3) An applicant's income and resources are used for assessing the

person's level of need.
 Social assistance
4) The grant of benefit is designed to bring a person's total income
until a defined maximum limit, taking into account other factors
such as family size and unavoidable fixed obligations such as rent.
The grants are not related to the applicant's previous earnings and
standard of living.
Social Insurance
 Social insurance
Insurance is a security mechanism, a means of protection against
a possible risk. Insurance is usually offered by entities both public
and private for the benefit of the insured people and seeks to build a
corpus fund until the day it is withdrawn for the need covered by
the insurance or on the day the insurance period reaches the date of
maturity.

Social insurance can be viewed in a similar light like Insurance but

the difference between the former and the latter is that Insurance is
taken for a specific purpose whereas the end purpose of Social
insurance is protection against the economic hazards of life.

Participation in Insurance is voluntary and participation in Social

 Social insurance
Social insurance is one of the devices to prevent an individual
from falling to the depths of poverty and misery and to help him
in times of emergencies and is usually offered by governmental
entities in majority of the countries of the world.

Social insurance can be defined as “a co-operative device, which

aims at granting adequate benefits to the insured on a
compulsory basis, in times of unemployment, sickness and other
emergencies, with a view to ensure a minimum standard of living,
out of a fund created by the workers, employers and the State,
and without any means test, and as a matter of right of the
insured”.
 Social insurance
Features of Social insurance:

1) Social insurance involves the establishment of a common

monetary fund out of which all the benefits in cash or kind are
paid, and which is generally built up of the contribution of the
workers, employers and the State.

(2) The contribution of the workers is kept at a low level so as

not to exceed their paying capacity, whereas the employers and the
State provide the major portion of the finances. This means that
there is no close correspondence between workers’ own
contribution, and the benefits granted to them.
 Social insurance
(3) Benefits are granted as a matter of right and without any
means test, so as not to touch the beneficiaries sense of self-respect.

(4) Social insurance is provided on a compulsory basis so that its

benefits might reach all the needy persons of the society who are
sought to be covered.

(5) The benefits are kept within fixed limits, so as to ensure the
maintenance of a minimum standard of living of the beneficiaries
during the period of partial or total loss of income.
 Social insurance
Key elements of Social insurance schemes:

1) Compulsory participation - participation in Social insurance

schemes is mandatory by the citizens.

2) Government sponsorship - Social insurance schemes are

created and supervised by the Government who may or may not
manage the schemes, relying on private participation in case of the
latter.

3) Contributory finance - The corpus fund of Social insurance

schemes is built by means of mandatory contributions from the
employer and employee. The level of contribution is set at a level
 Social insurance
4) Eligibility derived from contributions - Eligibility for benefits
under Social insurance is proportionate with the ratio of the
employee and the employer's contribution in the past and in the
present.

5) Benefits prescribed by law - The quality and quantity of the

benefits receivable under the Social insurance schemes is fixed by
legal sanction which is developed, notified and applied to the
participants. Scheme administrators do not have much discretion,
while deciding the amount of the benefits and the persons eligible
to receive them.
 Social insurance
6) On a need basis not on basis of contribution - Social insurance
programmes are generally designed to favor the persons who are
genuinely in a greater need for them. The benefits receivable under
these schemes are not directly related to the contributions. In other
words, a lesser paid worker stands to gain benefits in a higher
proportion than a manager level officer whose salary is higher, even
though both of them contribute the same amount of contribution to
the scheme.
 Social insurance
Social insurance schemes are favored by policy makers in a
higher volume and quality than Social assistance scheme
because the former is able to raise a far more greater corpus of
money in a structured and easy way and is able to aid and enable
the assistance and upliftment of the citizens, workers and other
individuals in need.

Social insurance principles have been widely adopted in the

formation and development of comprehensive insurance
schemes for protecting the citizens and the people against the
contingencies and hazards of life.
 Social insurance
Inspite of the greater benefits offered by Social insurance schemes,
Social assistance schemes have not been stopped and are used to
reach, aid and enable the segments of society who are not
covered by and are not entitled to receive the benefits of Social
insurance schemes.

These schemes are likely to continue for a few years ahead in the
future with the current development being the efforts for forming a
more symbiotic and congruent alliance of Social assistance and
Social insurance schemes on the common goal of ensuring Social
security for all.
 47

That’s all
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