Unemployment allowance: 50% of pay for 3 months

Unemployment allowance: 50% of pay for 3 months

The Centre on Thursday eased norms to offer 50% of salary for three months as unemployment allowance to lakhs of workers who are members of the Employees State Insurance Corporation and lost their jobs due to the coronavirus pandemic.

The move comes as a major relief for industrial workers, who have lost jobs or are on the verge of losing jobs due to the impact of the pandemic and the lockdown, which had stalled economic activity. There have been demands from several sections to provide wage relief to workers hit hard by the pandemic. In fact, at least two months ago, the finance ministry and Niti Aayog had demanded that the rules be eased.

The employees will be eligible to claim the allowance for three months (90 days) during the period from start of lockdown on March 24 to December 31. They should have been part of the ESI scheme for two years during the period from April 1, 2018, to March 31, 2020, and should have contributed at least for 78 days during the period from October 1, 2019, to March 31, 2020 and also in one of the other three six monthly contribution periods from April 1, 2018.

V Radhakrishnan, member of the ESIC board and national executive member of Bharatiya Mazdoor Sangh, said the move will benefit around 30-35 lakh workers and provide relief to those who have lost jobs.

The liberalised scheme has been introduced by modifying the Atal Bimit Vyakti Kalyan Yojana scheme. The ESIC scheme covers workers earning up to a specified limit and also entitles them to unemployment allowance.

Under the scheme, relief to the extent of 25% of the average per day earning during the previous four contribution period is paid up to a maximum 90 days of unemployment once in a lifetime subject to certain conditions. This has now been raised to 50%.

The conditions stipulate that the insured person should have been rendered unemployed during the period relief is claimed. He or she should have been in insurable employment for a minimum period of two years immediately before his/her unemployment.

It also says that the insured person should have contributed for at least 78 days during each of preceding four contribution periods.

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Sources said the earlier condition was the claim had to be submitted through the employers but now conditions have been eased to allow workers to approach the ESIC office to get the claim.

Instead of the relief becoming payable 90 days after unemployment, it shall become due for payment after 30 days.

The ESIC has decided to extend the scheme for one more year up to June 30, 2021. The decisions were taken at a meeting of the ESIC headed by minister of state for labour Santosh Gangwar. The meeting also decided to set up ICU and HDU services at 10% of total beds in ESIC hospitals, a government statement said.

To combat the impact of the novel coronavirus on the working population, the central government may give unemployment benefits to a section of organised workers who may lose their jobs due to the pandemic, the Business Standard has reported.

The Ministry of Labour and Employment is looking to extend the ‘Atal Beema Vyakti Kalyan Yojana’ and allow workers to avail benefits of unemployment insurance if they are impacted by the coronavirus, a senior government official told the publication.

The ‘Atal Beema Vyakti Kalyan Yojana’ is a scheme that provides unemployment insurance to workers who have subscribed to the Employees’ State Insurance (ESI) scheme.

The ESI is a self-financing health insurance scheme for formal sector workers in India. It is managed by the Employees State Insurance Corporation (ESIC).

Under the scheme, workers get compensation in the form of cash to the tune of 25 percent of the average salary that they were getting in the last two years of their job for a period of up to three months of unemployment, said the report.

However, workers should have been a subscriber of the ESIC for at least two years to get the unemployment benefit, and this can be availed only once in a lifetime.

According to an estimate by the International Labour Organization (ILO) up to 25 million people might become unemployed worldwide due to the impact of COVID-19, the report said.



Meanwhile, the central government is working on a financial package for various sectors, including civil aviation and tourism to deal with the fall-out of the coronavirus pandemic that has impacted the economy.



Prime Minister Narendra Modi, on March 19, announced setting up of a task force under Finance Minister Nirmala Sitharaman that will take necessary actions "in the near future" after analysing the coronavirus pandemic situation.



In his address to the nation, PM Modi said that - keeping in mind economic challenges posed by the coronavirus outbreak - the COVID-19 Economic Response Task Force would be set up.



"In this time of crisis, I appeal to all businesses and the high-income section of the society to be sensitive towards the economic interests of all those whose services you take. It is possible that in the coming few days, these people may not be able to attend work, and in this situation, please do not cut their wages. Decide humanely and sensitively," PM Modi said.

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