SOCIAL SECURITY

Meaning of Social Security

Protecting a worker and his family against work or health related
eventualities.
Eventualities like Sickness, Maternity, Disability, Death,
Unemployment, Old age.
 Social Security in India covers treatment, rehabilitation or
compensation.
 If there is no provision of social security then there can be no
human dignity.
 Lack of Social Security in India leads to destitution, crime, child
labour, etc

Introduction
All the Industrial countries of the world have developed measures to
promote the economic security and welfare of individual and his
Family. These measures have come to be called as social security.
Social security is a dynamic concept and an indispensable chapter of a
national programme to strike at the root of poverty, unemployment and
diseases.
In general sense , social security refers to protection provided by the
society to its members against providential mishaps oer 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 allthe
main contingencies of life. In other sense, social security is primarily
an instrument of social and economic justice.
OBJECTIVES
The objectives of social security can be sub – summed under three
categories.
1. Compensation
2. Restoration
3. Prevention
Compensation: Compensation ensures 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, i.e., destitution and loss of health, limb, life or work.
Restoration: It connotates cure of one’s sickness, reemployment so as
to restore him/her to earlier condition. In a sense, it is an extension of
compensation.
Prevention: These measures imply to avoid the loss of prodctive
capacity due to sickness, unemployment or invalidity to earn income.
In other words, these measures are designed with an objective to
increase the material, intellectual and moral well – being of the
community by rendering available resources which are used up by
avoidable disease and idleness.
Definition of Social Security by Sir William Beveridge
In 1942, Sir William Beveridge headed a committee that national
schemes of social insurance in Great Britian during 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 he 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 should be tackled. They are
  Want
 Disease
 Ignorance
 Squalor
 Idleness
DEFINITION
Sir William Beveridge (Freedom from Want) : 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
report he defines social security as follows.
Social security needs vary and Lord Beveridge, listed eight kinds of
primary conditions which demand social security.
a. Unemployment
b. Disability
c. Loss of Livelihood
d. Retirement
e. Marriage
f. Funeral Expenses
g. Childhood
h. Physical disease or incapacity

(a)Unemployment: that is to say, inability to obtain employment by a

person dependent on it and physically fit for it, met by unemployment
benefit with removal and lodging grants.
(b) Disability: that is to say, inability of a person of working age,
through illness or accident to pursue a gainful occupation, met by
disability benefit and industrial pension.
(c) Loss of Livelihood: by a person not dependent on paid
employment, met by training benefits.
(d) Retirement: from occupation, paid or unpaid, through age met by
retirement pension.
(e) Marriage: needs of a woman met by Housewife’s policy.
(f) Funeral expenses: of self or any person for whom one is
responsible, met by a funeral grant.
(g) Childhood: provided for by children’s allowances if in full time
education, tillsixteen.
(h) Physical disease or incapacity: met by medical treatment,
domiciliary and institutional for self and dependents by comprehensive
health service and by post – medical rehabilitation.
The Beveridge report argued that there were “five giants” that were
stalking the land and that should be tackled.
Beveridge report is seen as the foundation stone of the current social
security system as he has suggested that social security system would
play a role in reducing inequality and preventing poverty if social
security is intended to fulfill the need to abolish want by ensuring that
every citizen willing to serve according to his powers has at all times
an income sufficient to meet his responsibilities.
Want – The need for an adequate income for all.
Disease – The need for access to health care.
Ignorance – The need for access to educational opportunity
Squalor – The need for adequate housing.
Idleness- The need for gainful employment.
Major Characteristics
 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, oldage etc.
 These benefits are provided in three major ways such as social
assistance, social insurance and public services.
INTERNATIONAL LABOUR ORGANISATION (ILO)
Social security is 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 bread winner.
ILO Social Security (Minimum Standards0 Convention No. 102 of
1952 & Social Security
The principles anchored in convention No. 102 are
 Guarantee of defined benefits.
 Participation of employers and workers in the administration of
the schemes.
 General responsibility of the state for the due provision of the
benefits and the proper administration of the institutions.
 Collective financing of the benefits by way of insurance
contributions or taxation.
 The Social security (Minimum Standards) Convention 1952 (No
102) is the flagship of all ILO Social security Conventions, as it
is the only International instrument, based on basic social security
principles, that establishes worldwide agreed minimum standards
for all nine branches of social security. These branches are
 METHODS OF SOCIAL SECURITY

Basically there are two methods applied in the field of social security ,
namely
1. Social Assistance
2. Social Insurance
Though, these two method differ in their evolutionary process and
approach, they have been designed to serve the same ends, and both
are supplementary and complementary to each other.
Social Assistance: Social assistance is the oldest measure of social
security measures. There are evidences that provisions similar t o
modern social assistance existed centuries ago. In India, the kings and
landlords used to provide security to their subjects in the cases of
emergencies and family destitution. The practice of “Zakat” in Islam
law is well documented in this regard. This was a poor taxlecied on
the rich people by Muslim kings. The money raised through this tax
was spent for the purpose of providing welfare and social security of
needy.
In Europe, social assistance can be traced back to the Elizabethan
poor law of 1601, it was the first country to start and regularize social
assistance in its rudimentary form. Gradually this concept spread over
all the British colonies and later on to the other countries around the
globe.
According to International Labour Organisation social assistance
is “ service or scheme, which providesbenefits to persons of small
means as of rights in amount sufficient tomeet the minimum standard
of needs and financed from taxation”.
All social assistance schemes are funded through general revenue
rather than individual contribution, with statutory scales of benefits
provided according to the person’s means of survival. Conditions of
entitlement are prescribed by statutes and require that the prospective
beneficiaries have limited means and assets. The assessment of
economic status of the applicant is known as “means test”. Social
assistance very closely associated with social work services in many
countries (especially developing countries).
The Social workers are often required not only to assess the
claimant’s eligibility, but to provide case work services and encourage
the client to become self – sufficient. Social assistance represents the
unilateral or collective responsibility of the community towards its
dependent groups. Thus, it is provided by the society or the
government to poor and needy individuals.

Benefits provided through the method of social assistance

Benefits based on means test
Benefits based on means test are provided after the test of income,
assets, or capital, which the applicant may survive on.
Advantages
 They redistribute resources to the most needy.
 They are progressive in the sense that they redistribute resources
vertically from rich to poor.
 They are based on he idea of socialjustice andequality.
 They stand on the ground of humanitarian philosophy.
 They are concern about reduction of suffering.
Disadvantages
 They are complex and difficult administer.
 They often fail to reach those in real need, because of ignorance,
fear, stigma and complexity attached to them.

Social Insurance
Lord Beveridge defined social insurance as “givingin return for
contributions, benefits upto subsistence level, as of rights and without
the means test so that individual may built freely upon it. Thus, social
insurance implies that it is compulsory and hat men stand together
with their fellows”. This method of social security is built on the
principle of “mutual aid”.
The basic elements of Social Insurance are:
 Social Insurance is financed by the contributions, which are
normally shared between the employers, workers with the
participation of the state in the form of supplementary
contribution and other subsidies from the general revenue. The
worker’s contribution is this regard is determined on the basis of
level of income.
 Participation in the social insurance is compulsory and there is a
requirement of legal process in its execution.
  The contributions are accumulated in a special fund, out of the
contribution are paid
 The person’s right to benefit is secured by his own contribution
without any test of needs or means.
 The benefits are not directly related to contributions. There is a
component of redistribution in the programmes, and lower wage
earners generally get back proportionally more that the higher
wage earners.
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.
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.
Advantages of Social Insurance:
 The level of feeling secure is higher among the participant in this
scheme.
 It is a reliable way of raising funds for the benefits.
 The benefits under this scheme are almost undeniable once the
contributions are made.
Disadvantages of Social Insurance:
 This scheme ignores large number of people such as,
unemployed, women home makers, chronically sick, old, infirm
and disabled people.
 Poor people are unable to pay the contributions. As a result they
are put out of the system of the scheme.
Similarities and Differences between Social Assistance and Social
Insurance
Social Assistance and Social Insurance have some similar features
because both are social in approach and are organized under a law
passed in this behalf. Both provide a legal title to benefits. But both
differ from each other in some respects. First, social assistance is
financed by the general tax payers, while social insurance is financed
by tripartie or bipartie contributions. Secondly, social assistance aims
at to provide minimum subsistence to those who cannot make it ontheir
own. Hence, the beneficiary has to satisfy a means test for being
entitled to such benefits while social insurance schemes aim to protect
a minimum standard of living related to beneficiaries immediate
standard of living as reckoned by his daily earning. Thirdly, Social
Insurance ignores the income and means of liable relations while social
assistance makes the beneficiary as first charge on the liable relation.
Benefits are paid only when the specified relations do not possess
sufficient means to support the beneficiary. Thus social assistance is a
progression from private charity towards private insurance where as
social insurance isa progression from private insurance towards public
welfare measures.
FOUR MODELS OF SOCIAL SECURITY ARE
CURRENTLY FUNCTIONING IN THE COUNTRY
a) The Welfare Fund Model: (partially or fully contributory for
workers in the unorganized sector, which is based on tripartie
arrangement under the direct supervision of the state).
b) The Social Assistance Model: (cash payment to defined
beneficiaries (means test) through budgetary provision).
c) Social Security scheme Model: (schemes designed and
implemented by governments or their agencies for defined
categories of workers in the unorganized sector)
d) The Mutual Help Model: (mainly operating through the
contribution of workers or the poorer sections for some social
security through mutual assistance but promoted and mediated by
NGO’s).
Existing important Social Security Legislation in
India:
"Within the boundaries of its economy and advancement, the
nation wil make effective stipulations retaining the right
to work, to learning, and to government aid in cases of
joblessness, old age, sickness, and debilitation, and other
instances of un-served wants," says Article 41 of India 's statute.
At present, many laws covered social security for
employees and workers in India. However, the important social
security legislation in the country for employees and
workers working in industries can be discussed as under;
a) The 1923 Workmen 's Insurance Act:
The Government of India passed the Workmen’s Compensation
Act in 1923 to impose upon the employers an
obligation to pay compensation to workers for accidents arising
out of and in the course of employment Workers
who operate in industries, mining, crops, manually powered
equipment, building sites, railroads, ships, spectacles, The Armed
Forces, informal laborers, and workers protected by the Worker's
State Security Statute of 1948 are exempt from this act.
b) The Worker's State Insurance Act, which was enacted in
1948:
In 1948, the Employees State Security Act was enacted to offer
medical care and job security to industrial employees
who were ill. This Act offers medical advantages to covered
individuals and their relatives in the form of professional
attention, treatment, medications, and injections, when the option
has been provided to the households as well.
c) The Maternity Benefits Act, 1961:
The Government of India enacted The Maternity Benefits Act, of
1961 to provide uniform standards for maternity
protection. It was implemented in the first instance to all factories,
mines, and plantations workers except those to
which the Employee’s State Insurance Act applied. This Act was
amended in 1976 to extend the benefit to all women
workers covered by the ESI Act.
d) The Workers Provident Fund Act, which was enacted in
1952:
Workers are eligible for pension advantages such as provident
funds, familial pensions, and payment coverage under
the Workers' Provident Fund and Other Articles Act, 1952. This
Act covers any factory in any of the industries listed
in Schedule A that employs 20 or more people or that the Central
Administration announces in the federal Register.
The Act, meanwhile, did not applicable to collaborative
organizations with fewer than 50 members that operate absent
the use of electricity.
e) The Gratuity Compensation Act of 1972:
The payment of Gratuity Act was enacted in 1972. It applies to
all factories, mines, oil fields, plantations, ports,
railways, ships, or establishments in which 10 or more workers
are employed. All employees and workers working in
these establishments are entitled to receive gratuity irrespective
of the number of their wages. The Government of
India is empowered under the Act to extend this Act to any
establishment. The amount of gratuity is payable on
retirement, death, disablement, or termination, subject to the
condition that the employee has rendered five years of
continuous service with the same employer. Gratuity is payable
at the rate of 15 days' wages for each year of completed
service or part thereof subject to a maximum of 20 months' wages
or Rs. 3,50,000 whichever is lower.