The Hindu Business Line : Cabinet okays social security scheme for unorganised workers

THE Union Cabinet on Wednesday approved a new social security scheme for workers in the unorganised sector as a "pilot project" ahead of a full legislation proposed by the Labour Ministry.

"We would like to give the scheme a statutory shape but before that we want to see how the pilot project functions," the Union Parliamentary Affairs Minister, Ms Sushma Swaraj, told reporters after the Cabinet meeting here.

The scheme would benefit 37 crore workers in the unorganised sector who are not covered by the Provident Fund Act and would be managed by the Employees Provident Fund Organisation (EPFO), she said.

It provides a pension of Rs 500 per month on retirement or disability. In the case of the death of the employee, his family would be the beneficiary of the pension. In addition, the employees would be eligible for personal accident insurance or cover in the event of death.

The scheme would be financed through contribution from the employee (Rs 50 per month), the employer (Rs 100 per month) and the Government at 1.16 per cent of the national floor wage, which is Rs 1,800 per month at present. Workers drawing wages of over Rs 6,500 per month are not eligible for the scheme.

Workers in the age group of 36-50 for can also join the scheme with a contribution of Rs 200 per month shared equally by the employee and employer. But the option will close after five years of the launch of the scheme.

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