Introduction To

Social
Security

For UPSC EPFO Enforcement Officer

Introduction to Social Security Free UPSC EPFO EO e-book

What is Social Security?

Social Security is the security that society furnishes through appropriate
organizations against certain risks to which its members are exposed. All the
industrial countries of the world have developed measures to promote the
economic security and welfare of individual and his family.
Social Security is a dynamic concept and an indispensable chapter of a national
program to strike the root of poverty, unemployment and disease.

Definition of Social Security by Sir William Beveridge:

In 1942, Sir William Beveridge headed a committee that reviewed the national
schemes of social insurance in Great Britain during the post war period. In his
repost he has defined social securities as follows – The security of an income to
take place of the earnings when they are interrupted by unemployment by
sickness or accident to provide for retirement through age, to provide against
the loss of support by the death of another person and meet exceptional
expenditure, such as those connected with , death, birth and marriage.
The Beveridge repost argued that there were five giants that were stalking the
land and that should be tackled. They are:
➢ Want
➢ Disease
➢ Ignorance
➢ Squalor
➢ Idleness

Importance of Social Security

The importance of social security systems for society is now hugely accepted.
However, there is less unanimity regarding the economic importance of social
security systems.
Regardless, that social security systems should be understood as a productive
factor in economic development is a view that is gaining ground.
This policy is usually applied through various programs designed to provide a
population with income at times when they are unable to care for themselves.
Introduction to Social Security Free UPSC EPFO EO e-book

Many European countries introduced social security program early in their

development; before they were rich societies.

Characteristics of Social Security

The purpose of any social security measure is to provide individuals and
families the confidence that their standard of living will not be eroded by the
meeting with socio-economic contingencies in their life. The concept of social
security varied from country to country.

This is understandable in a way because of the differential social and economic

development of societies in different parts of the world. But the need for
economic protection is universal and hence social security measures have
three major characteristics even though they vary from country to country and
from time to time according to the need of the people and countries
resources.
They are as follows:
➢ Social Security measures are established by law.
➢ They provide cash benefits to replace at least a part of income in
meeting contingencies such as employment, maternity, employment
injury, sickness, old age etc.
➢ These benefits are provided in three major ways such as social
assistance, social insurance and public services.

The most well-known techniques adopted by social security at present at

present are no doubt social assistance and social insurance which are
discussed as follows:
Social Assistance:
Social Assistance schemes will grant benefits to people needing them. Social
assistance is a devise organized by the state by providing cash assistance and
medical relief, to such members of the society as they cannot get them from
their own resources.
Introduction to Social Security Free UPSC EPFO EO e-book

The ILO defines social assistance schemes as one that provides benefits to
persons of small means granted as of right in amount is enough to meet a
minimum standard of need and financed from taxation.
The special characteristics of this measure is that it is financed wholly from the
general revenues of the state and benefits are provided free of cost.
Social Insurance:
Social Insurance was first introduced by Otto Von Bismarck in Germany and
since spread its root across the countries. Social insurance is a plan insurance
which aimed for protecting the wages of those workers who do not have
sufficient sources to support their own self or their families in case of loss of
income due to meeting contingencies in their work life.
From the above analysis the following ingredients may be regarded as basic
features of schemes of social insurance:
➢ Certain risks which cannot be faced by the persons in their individual
capacity are faced collectively be a group of persons.
➢ For that purpose, they have pooled together their resources.
➢ Benefits are provided to them in case of contingency.
➢ This makes them maintain their standard up to a subsistence level.
➢ The payment of contributions is obligatory since they are insured against
the risk compulsorily.

Causes of Social Problems:

Social problems arise out of the pathological social conditions. They occur in all
societies -simple (small, isolated and homogenous with a strong sense of group
solidarity) as well as complex (which are characterized by impersonal
secondary relations, anonymity, loneliness, high mobility and where change is
faster), that is, wherever and whenever a relationship is affected between a
group of individuals leading to maladjustments and conflicts.
Introduction to Social Security Free UPSC EPFO EO e-book

There are 3 factors that are important in the understanding of the casual
factors in social reforms:
a. The casual conditions are numerous. Broadly, we van classify them into
2 groups
i) Found in individuals.
ii) Found in the Social Environment
All factors are present in all the problems, i.e., the casual factors vary from
problem to problem.
b. Social problems provide a strong basis of common casual factors.
c. Social problems are interrelated and independent in the sense that they
are cumulatively promotive and proactive, i.e., they foster and
encourage one another.
Political Causes of Social Problems:
Found in Individuals Found in the Social Environment
Hereditary Traits Contradictions in Social Systems
Acquired Traits Malfunctioning of Economic Systems
Lack of change in Religious Systems
Defective Functioning of Political
Systems

Objectives of Social Security:

Compensation, Restoration and Prevention are the three major objectives of
Social Security.
➢ Compensation implies security of income. It is based on this
consideration that during the period of contingency of risks, the
individual and his/her family should not be subjected to a double
calamity, thus by destitution and loss of health, limb, life or work.
➢ Restoration commutates cure of one’s sickness, reemployment to
restore him/her to earlier condition. In a sense, it is an extension of
compensation.
➢ Prevention measures are directed to avoid the loss of productive
capacity due to sickness, unemployment or invalidity to earn.
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