Unit: 5

Concepts and scope of Social Security

The word social security originated in USA in 1935. It means to help the people
when they are unemployed and exposed to risk such as sickness, accidents, old
age, maternity etc.

Scope of Social security:

It is in form of maternity benefits, health insurance, voluntary and compulsory

insurance, provident fund schemes. These social security programs vary from
country to country but have the following three common characteristics:

1. They provide some form of cash payment to the individual as compensation.

2. They are established by law.
3. Social security services are provided in 3 following ways: a) Social insurance:
Here the contribution is made either by government or employer to help the
employee in his or her old age.b) Social assistance: Here government helps in case
of contingencies. No contribution is made by the workers.c) Public service: These
programs are directly financed by government for every member of the
community. These are scopes of social security

TYPES OF SOCIAL SECURITY :

The two important types of social security are as follows:

1. Social Assistance

2. Social Insurance.
1. Social Assistance:
Social assistance refers to the assistance rendered by the Government to the needy
persons without asking them to make contributions to be entitled to get such
assistance. In other words, social assistance includes those benefits which are
provided by the Government without any contribution from workers and
employers. Workmen’s compensation, maternity benefits, old age pensions, etc.
are the examples of social assistance.

2. Social Insurance:
Social insurance refers to a scheme of maintaining fund from the contributions
made by the employees and employer, with or without a subsidy from the
Government. In other words, social insurance can be defined as a device to provide
benefits as of right for persons of small earnings; in amounts which combine the
contributive efforts of the insured with subsidies from the employer and the
Government Examples of social insurance are provident fund and group insurance.
Strictly speaking, these two types of social security measures may be said to be the
two faces of the same coin. As a matter of fact, both of them are integral parts of a
social security system. Here, it seems pertinent to make distinction between social
insurance and commercial insurance. Following Table 21.1 bears out how social
insurance differs from commercial insurance.

Social Security Measures in India:

In the pre-industrial society, security against various contingencies was provided

by the institutions like joint family, caste, guild, village community, religious
institutions, etc. Eventually, the emergence of industrial revolution changed both
the nature of insecurity as well as the remedies provided for it. The United States
of America is considered to be the birth place of modern social security measures.

The social security measures in the USA were inaugurated with the enactment of
the Social Security Act, 1935 under which a United Social Insurance System was
established as the first major step taken in the field of social security. An old age
pension system was also established by the Act of 1935. In 1938, a Social Security
Board was set up to administer social security measures in the United States. Later
on, the term ‘social security’ was adopted in various countries, of course, in
different forms.

The introduction of social security measures in India is expectedly a recent one. In

fact, the making of climate for industrial security in India started from the 10
Session of the International Labour Conference held in 1927 in which two
Conventions and Recommendations were adopted for social security in the
country. These were discussed thread bare in the Indian Legislative Assembly in
1928. However, the Assembly resolved that the introduction of any comprehensive
scheme for social security on the lines proposed by the ILO was impracticable
under the conditions then prevailing in the country.

Later the Preparatory Asian Regional Labour Conference, held in New Delhi in
1947 adopted a comprehensive resolution on social security implementation in
various Asian Countries. Following this resolution, the Employees State Insurance
Act, 1948 was enacted in India to inaugurate the social security measures in the
country.
As stated earlier, India, as a ‘Welfare State’, is expected to take care of the citizens
from the ‘cradle to the grave’. It is this realisation the constitution of India lays
down that the State shall, within the limits of its resources and development, make
effective provisions for securing public assistance in event of unemployment, old
age, sickness, and disablement.

This constitutional obligation has served as epoch making in India’s efforts in the
field of social security provisions in the country. Since then, various social security
schemes have been introduced in the country. Among the social assistance
schemes, old-age assistance schemes are the most important ones. It was the
Government of Uttar Pradesh who introduced old-age assistance scheme for the
first time in 1957.

The scheme was designed to pay a monthly benefit to needy individuals over the
age of 70 years who had no one to support them. Later on, similar schemes were
introduced in Andhra Pradesh in 1961, Tamil Nadu in 1962, Punjab and Haryana
in 1963 and subsequently in many other states. Yes, the eligibility conditions to
avail of these benefits and levels of benefits differ across the States.

Subsequently, with increasing need for social security along with the increasing
levels of national development, the Government made various legislative
provisions to afford the needy people/workers protection against uncertainties in
their lives.