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The Coffee Break Guide to Compliance – Vol. 7

Posted by: on 20 July 2018 in Amendments, Compliance

This post is part of the Coffee Break Guide to Compliance by Anandan Subramaniam. Please subscribe to the blog updates if you’d like to be notified of these posts. As always, your questions are welcome: please comment below with your doubts and queries.

The Coffee Break Guide to Compliance – Vol. 7 {Employee State Insurance (ESI) Dependent Benefit Payable on Death of an Insured Person (Worker) Due to Employment injury }

The Employees’ State Insurance Act, 1948 (ESI) is the largest social security legislation in India that provides for medical care and cash benefit in the contingencies of sickness, maternity, disablement and death due to employment injury to workers.

Dependent benefit is available to dependents of the insured person, in case of the dependent’s unfortunate demise due to employment injury.

First, what is employment injury? It is a personal injury caused by accident or occupational disease arising out of, and in the course of, his INSURABLE EMPLOYMENT.

Second, we know that if an accident happens in the workplace, it is an employment injury. But what is the accident (or death) that happens during the “course of employment”?

An accident which may occur while commuting between the place of residence and workplace is also treated as notional extension of employment, and, as a result, and the injury sustained (or death occurred) from such accident is construed as an employment injury.

Here, most importantly, the nexus between the time, place and circumstances and employment is established, for purpose of disablement or death benefit.

What is dependent benefit? It shall be paid to the dependents of the insured person who dies as a result of an employment injury, in the following manner:

(1) In the case of death of the insured person, the dependents’ benefit shall be payable to his widow, children and widowed mother as follows:

  • to the widow during life until remarriage, an amount equivalent to three-fifths of the full rate** and, if there are two or more widows, the amount payable to the widow as aforesaid shall be divided equally between the widows;
  • to each legitimate or adopted son, an amount equivalent to two-fifths of the full rate until he attains the age of twenty-five years:

    Provided that in the case of a legitimate or adopted son who is infirm and who is wholly dependent on the earnings of the insured person at the time of his death, dependents benefits shall continue to be paid while the infirmity lasts;

  • to each legitimate or adopted unmarried daughter, an amount equivalent to two-fifths or the full rate;
  • to the widowed mother during life an amount equivalent to two-fifths of the full rate.

(2) In case the deceased person does not leave widow or legitimate or adopted child or widowed mother, the dependents’ benefits shall be payable to other dependents as follows:

  • to a parent other than the widowed mother or grandparent, for life, at an amount equivalent to three-tenths of the full rate and if there are two or more parents (other than widowed mother) or grandparent the amount payable to the parents (other than widowed mother) or grandparent as aforesaid shall be equally divided between them.
  • to any other:
    1. male dependent, until he attains the age of eighteen years,
    2. female dependent, until she attains the age of eighteen years or until marriage, whichever is earlier or if widowed, until she attains eighteen years of age or re-marriage, whichever is earlier at an amount equivalent to two-tenths of the full rate**.

** Full rate: Ninety per cent of his wages actually earned or which would have been earned.

Funeral expenses: In case of sudden and unfortunate demise of the Insured Person, dependent gets an amount of ten thousand rupees towards funeral expenses.

Thus, ESI contribution is the best insurance coverage for workers, which financially protects the needs of the family in case of his unfortunate demise.

 


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