The unemployment rate in India hit record levels during the peak of the COVID-19 pandemic and had been increasing until the lockdown ended in mid-May. Labour participation rate has increased to around 40.66% according to data from the Center for Monitoring Indian Economy (CMIE), which is close to pre-COVID levels. However, several individuals are still being laid-off as part of restructuring operations, business continuity plans and other measures to cope with the economic consequences of the pandemic. Simpliance has received multiple queries on whether individuals are entitled to unemployment benefits in India? Whether ESI will pay their salaries for the period they are unemployed? Whether this would affect their medical benefits etc.?
This is why we have prepared this document that outlines the schemes available to individuals who are retrenched, the eligibility, quantum of compensation and period during which the same can be availed.
Schemes Offered by Employees’ State Insurance Corporation (ESIC)
There are two major schemes under the ESIC that offer unemployment benefits: –
- Rajiv Gandhi Shramik Kalyan Yojana
- Atal Beemit Vyakti Kalyan Yojana
Rajiv Gandhi Shramik Kalyan Yojana
The ESIC brought this scheme into effect on 1st April, 2005, its aim was to provide a social security net to insured persons who become unemployed due to one or more of the following events: –
- Closure of factory/establishment
- Permanent disablement of at least 40% arising out of non-employment injury
To be eligible for benefits under this scheme an individual must be an insured person under the ESI Act on the date of loss of insurable employment. This means that an individual was an employee who was contributing to the corpus of the fund to be eligible for availing unemployment benefit. Additionally, the insured person should have contributed to the scheme for a minimum period of 5 years prior to the loss of employment on account of the above-mentioned events.
Unemployment benefits under this scheme can be availed in one period or different periods of unemployment provided that each period shall not be less than one month. In other words, benefits can be sought for numerous spells of unemployment, but they must be a minimum of one month. The unemployment benefit is not combined with other benefits under the act such as sickness benefit, maternity benefit, or disablement benefit during the period where the insured person is without a job. In such a situation, the insured person receiving any of these other benefits shall be given the option to choose which benefit he/she wishes to avail. Any application for unemployment benefit must be submitted by the insured person within six months from the date of loss of employment.
The payment of unemployment benefit is subject to Section-61 of the ESI Act which states that entitlement to any of the benefits under the Act results in disentitlement of similar benefits under other enactments. Payment of unemployment benefit shall continue for a maximum period of twelve months and is equivalent to the Standard Benefit rate that corresponds to the average daily wages drawn by the insured person in the last four completed contribution periods, immediately preceding the date of unemployment.
To avail of unemployment benefits under this scheme the applicant must submit an application to the concerned Branch Office in Form US-1 attached with documentary proof in Form UA-2. The latter is the certificate of closure that may be accepted from an employer if he submits return contributions under Regulation 26(b) on permanent closure of the factory/establishment.
During the period where an insured person is entitled for unemployment benefit, they may also avail medical care for themselves as well as their families from the ESI Hospital/Clinic to which they were attached before loss of employment. In consonance with this, the medical benefit available to the insured person and their family members shall be provided for 12 months. There is also a Vocational Rehabilitation Skill Development scheme under the Rajiv Gandhi Shramik Kalyan Yojana that aims to reskill unemployed workers to aid them gain employment opportunities.
Atal Beemit Vyakti Kalyan Yojana
On 18th September 2018, the ESIC decided to provide unemployment benefits in the form of cash compensation to insured persons who have been rendered unemployed. The above scheme was launched with the intention of achieving the same is a welfare measure for employees as defined under Section-2(9) of the ESI Act. The scheme was launched vide the Corporation’s powers under Section-19 of the Act that provides that the Corporation may promote measures for the re-employment of insured persons in addition to the framework of benefits specified under the Act.
To be eligible for unemployment benefit under this scheme the insured person:-
- Should have been rendered unemployed during the period where relief is claimed
- Should have been in insurable employment for a minimum period of two years immediately preceding unemployment
- Should have contributed for not less than 78 days during each of the preceding four contribution periods
- Contribution in respect of such an individual should have been paid or payable by the employer
- Contingency of unemployment should not have arisen out of punishment for misconduct/superannuation or voluntary retirement
- Insured person’s AADHAR details and bank account should be linked with the database of insured persons
In case an insured person is working for more than one employer and is covered under the ESI scheme, he will be considered unemployed and only loses all gainful employment.
Benefits under the scheme includes relief in the form of cash compensation to the extent of 25% of the average per day earning during the previous four contribution periods to be paid for a maximum 90 days of unemployment, once in a lifetime of the insured person, that is payable on the submission of claim in the form of an Affidavit (Form AB-1) to the appropriate Branch Office.
Once the insured person has submitted the affidavit to the designated Branch Office a link for generating a claim on the ESIC portal will be provided. The employee can obtain a forwarding letter from his last employer (Form AB-2) generated from the system. He/She must then take printouts of the claim submitted as well as the letter and submit the same to the designated ESIC Branch Office. The employee’s claim will then be assigned a unique ID number that will correspond to his application for benefits.
The claim for relief under the Atal Beemit Kalyan Yojana shall be payable after three months of clear unemployment, prospective claims are barred. In case the beneficiary acquires gainful employment between the three months of unemployment, the relief shall be payable for the clear month of unemployment between the date of unemployment and date of re-employment. The relief under this scheme is payable by Branch Office to insurance directly to their bank accounts, this is why bank account details of the claimant in the ESIC database is a condition that must be satisfied to claim this relief.
An insured person shall not be entitled to any other cash compensation during the period where benefit under this scheme is being availed. This, however, does not apply to periodical payments of permanent disability benefits.
These are the two major unemployment benefits under the scope of the Employees’ State Insurance Act, 1948. The number of people availing of these schemes is still unclear and the approval-based process may place hurdles before some individuals who find it difficult to establish that they have been retrenched.
If you have any further questions pertaining to eligibility, mode of application or any other matter related to this post, please drop your queries in the comments below.
|Disclaimer: This blog is meant for informational purposes and discussion only. It contains only general information about legal matters. The information provided is not legal advice and should not be acted upon without seeking proper legal advice from a practicing attorney.|
Simpliance makes no representations or warranties in relation to the information on this article.
23 thoughts on “Unemployment Benefits Under ESI: RGSKY and ABVKY”
A well articulated Blog
Sir, I am terminated from job due to allegation of misconduct of sharing confidential business information of organisation to an Ex-employee.
Can I eligible for claim for unemployment benefit under ABVKY scheme.?
The ABVKY scheme related documents clearly state that the contingency of unemployment cannot arise out any punishment for misconduct or superannuation or retirement. So on the basis of the facts of your case you would be ineligible to claim unemployment benefit under ABVKY scheme
Sir, I resigned my job due to my family situations. Now i am an unemployee. whether i am eligible for this scheme.
To be eligible for benefits under this scheme an individual must be an insured person under the ESI Act on the date of loss of insurable employment. This means that an individual was an employee who was contributing to the corpus of the fund to be eligible for availing unemployment benefit. Additionally, the insured person should have contributed to the scheme for a minimum period of 5 years prior to the loss of employment on account of the above-mentioned events. To be eligible for unemployment benefit under this scheme the insured person:-
(a) Should have been rendered unemployed during the period where relief is claimed
(b) Should have been in insurable employment for a minimum period of two years immediately preceding unemployment
(c) Should have contributed for not less than 78 days during each of the preceding four contribution periods
(d) Contribution in respect of such an individual should have been paid or payable by the employer
(e) Contingency of unemployment should not have arisen out of punishment for misconduct/superannuation or voluntary retirement
(f) Insured person’s AADHAR details and bank account should be linked with the database of insured persons
If you fulfil these criteria you may be eligible under this scheme.
For those who lost job due to companies/establishments that were temporarily closed during covid-19 pandemic and reopened after 3-4 months, will abvky scheme be applicable ?
If you refer to the eligibility criteria in the article you will find (a) Should have been rendered unemployed during the period where relief is claimed, this does not refer to a temporary layoff. It refers to a permanent job loss and not any temporary halt in work. Hope this resolves your query.
I have applied ABVKY because my illness. But on portal my bank details are not clink and my father name is mismatch. I am suffering from illness. so ,
Can I send my documents to branch office by post. Because Branch office is 100 km away from my house?
And What con I do for father’s name mismatch?
Linking your bank account is mandatory for claiming benefit under ABVKY but in case an insured person’s bank account/AADHAR details are not linked with the ESIC, then the same may be authenticated by branch manager on the basis of a canceled cheque or the passbook of the claimant having his name on it, which the claimant must provide along with the claim for relief. The same shall be processed in Form AB-3. The documents must be filed with the designated Branch Office, for any further queries you may consult your branch office.
Can I add my details by my Ex Employer?
Can I send my documents to Branch office by registered post?
Previously Form-AB 2 was a mandatory requirement to be submitted to branch office, however the Government has relaxed the procedural norms pertaining to application for benefit under ABVKY and RGSKY, therefore the forwarding letter from last employer is not mandatory for a limited period. Please refer to our blog on the same for further details https://www.simpliance.in/blog/unemployment-benefits-under-abvky-increased/ Feel free to reach out to us for any further clarifications.
I have resigned on January 2020 and as on date unemployed. I have applied for ABVKY online and already got the filled in form AB 1. Should I have to submit form AB 2 along with AB 1 during submission of all documents to esi branch office ?
Previously Form-AB 2 was a mandatory requirement to be submitted to branch office, however the Government has relaxed the procedural norms pertaining to application for benefit under ABVKY and RGSKY, please refer to our blog on the same for further details https://www.simpliance.in/blog/unemployment-benefits-under-abvky-increased/
Feel free to reach out to us for any further clarifications
I am resign July 12th and my clearance also done my organization,but the reason is I am from odisha and my job location is Hyderabad however I have applied ABVKY but I am now in odisha .
Can it’s possible to I have submitted the document my state ESI office??
Thanks and regards
Rakesh Kumar Nayak
The documents must be filed with the designated ESI Branch Office, for any further queries you may consult your branch office.
Once the documents are submitted for RGSKY scheme to the concerned office. How many days do they take maximum to settle the claim.
sir my claim id 19060871 dt. 18/10/2020 till date not received 50% salary i bank account
why delay my job in Delhi NCR unemployed from 30/06/2020
For a specific opinion pertaining to your claim email firstname.lastname@example.org
This Srini from Hyd.
I left the org in oct’19 & joined another org in may’21. Almost 1.5 years unemployed so May i eligible for this scheme.
if eligible please guide me.
Please write to us at email@example.com for clarification of any query
Sir I have taken the benefit of ABVKY NOW I CAN CLAIM RGSKY
To be eligible for Rajiv Gandhi Shramik Kalyan Yojana the insured persons should be unemployed due to one or more of the following events: –
Retrenchment, Closure of factory/establishment, Permanent disablement of at least 40% arising out of non-employment injury. To avail of unemployment benefits under this scheme the applicant must submit an application to the concerned Branch Office in Form US-1 attached with documentary proof in Form UA-2.