India is a socialist country. Therefore, social benefits that are governed by labour laws are regarded as sacrosanct. Social security schemes in India not only protect the employees but also their families by giving benefits in financial security and healthcare. These schemes guarantee long-term sustenance for families when the earning member retires, dies, or suffers a disability, thus helping insure the future and protect the interests of the employee.
The various Labour Laws of India provide Employee Death Benefits that cover the subscribers and their families.
Employees State Insurance
The ESI scheme is a comprehensive social security scheme devised to protect the employees against financial distress arising out of events such as sickness, maternity, disablement/death due to employment injuries and to provide medical care to the employees and their families. The scheme applies to all employees of a covered unit, whose monthly remuneration does not exceed Rs. 21,000 per month.
In case of the death of the insured employee due to employment injury, the widow (till death or remarriage at 3/5th of the full rate), widowed mother (till death at 2/5th of the full rate), and children (sons at 2/5th of the full rate each till he attains the age of twenty – five years and unmarried daughters at 2/5th of the full rate till they get married) are entitled to dependents’ benefit. The rate of the dependent’s benefit is 90% of the standard benefit rate of the wages of the deceased insured person.
As part of the employee death benefits measure, the ESIC has recently implemented the ‘ESIC COVID-19 Relief Scheme’. The scheme is a welfare measure for all insured persons under section 2(9) of the ESI Act. This scheme has come into force to provide relief to the dependents of the insured persons in case of their death due to COVID-19. The insured person’s dependent will be paid periodically in case of his death. This scheme shall be valid for 2 years w.e.f. 24th March 2020.
Employees Compensation Act
The “Employees Compensation Act, 1923” provides payment in the form of compensation by the employers to the employees for any injuries they have suffered during employment.
If an employee contracts any disease specified as an occupational disease while in the employment of an employer in whose service they have been employed for not less than six months or incurred any injury by accident during employment, then the employee is eligible to claim compensation under this act. Thus, the employer will only be liable if the death of the employee is due to the infectious and parasitic diseases that occurred in the course of the employment in any work that involves exposure to health/laboratory work exposure to veterinary work or handling animals, animal carcasses, part thereof or merchandise contaminated by the same or any other work carrying a particular risk of contamination.
The dependents of the deceased employees are eligible for the employee death benefit amount equal to 50 per cent of the monthly wages of the deceased employee multiplied by the relevant factor, or an amount of Rs. 1.2 lakh, whichever is more; in case of such death of the employee. Every dependent shall claim compensation in case of death, within two years from the date of death.
Employees Deposit Linked Insurance
EDLI is an employee death benefit scheme also known as Employees Deposit Linked Insurance that provides insurance benefits to the members of EPFO. A nominee or legal heir gets a lump sum payment of Rs. 7 lakhs in case of the death of a member during the service period. EPFO’s major agenda in launching the employee death benefit was to ensure that the family members get financial assistance in case of the death of its member. The insurance cover depends on the salary drawn in the last 12 months of employment before death.
The following people are eligible for EDLI, (i) members of the family (nominees) nominated under EPF Scheme (ii) In case of no nomination, all members of the family (except major sons, married daughters with major sons, and married granddaughters), (iii) In case of no family, and no nomination, legal heir, guardian of a minor nominee/family member/legal heir.
The documents required for EDLI death benefit includes the death certificate of the member, guardianship certificate, succession certificate (to be claimed by a legal heir) and a cancelled cheque.
Labour Welfare Fund
The Labour Welfare Fund is managed individually by state authorities. It’s a statutory contribution that aids in the form of money or provides necessities for those who are in need. The labour welfare fund provides for the labourers who are in need to give them financial assistance, improve their working conditions, provide social security and increase the quality of their living standards.
Considering that it is managed by state authorities, the funds provided differ from state to state. Few states provide not just pensions, family pensions and basic allowances but also maternity allowances, marriage allowance, allowances for treatment, education and other expenses like death allowance. Death allowances can include accidental death expenses or natural death expenses along with funeral expenses.
Employee death benefits give financial assistance to the widow or dependent of the deceased employee. The basic eligibility criteria are that the employee should have been contributing to the Labour Welfare Fund, their monthly salary should not exceed Rs. 25,000 (basic pay + dearness allowance), the claim will be given to the legal heir of the employee and it has to be applied within one year from the date of death (eligibility criteria can differ from state to state). We will discuss these important benefits from the respective states labour welfare fund in detail in our next blog.
What do you think of the various employee death benefit schemes in India? Let us know your thoughts below!
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