What is Unemployment Insurance ?
Under unemployment insurance, the insured receives benefits in case they have lost their job for no apparent fault of theirs. This insurance is mainly provided by the government and not by insurance companies, and the benefits can be accessed for a limited time period. There are other criteria of eligibility that can help them get the insurance claim for unemployment. In situations like self-employment or voluntary unemployment, the individual is not entitled to any claims.
Unemployment Claim Across the World
A lot of countries around the world provide unemployment benefits to their citizens. In Finland and Norway, the insurance claim for unemployment can be somewhere between 80-90% of the last salary. In Germany, Israel, Japan and Sweden these claims range between 66 and 90% of their previous pay. In the USA, the maximum an unemployed citizen is entitled to is 27% of the income. Australia is also close to the USA in terms of unemployment claim. A single, childless individual in Australia is entitled to 28.9% of the previous income.
Unemployment Claims in India
A majority of the Indian population is unaware of this, but the Indian government does provide unemployed people with benefits. The labour laws of India are formulated to ensure the welfare of the working population of the country. There are many benefits provided to the employees under the acts of labour laws and the insurance benefits are provided under the Employee State Insurance Act, 1948. The awareness of these benefits is very low, and hence the majority of unemployed citizens in India are unable to avail these benefits. The scheme that provides coverage to unemployed on behalf of the government of India is Rajeev Gandhi Shramik Kalyan Yojana (RGSKY).
Rajeev Gandhi Shramik Kalyan Yojana (RGSKY)
RGSKY was introduced on April 1, 2005, by the central government. All the employees are entitled to these benefits under the Employee State Insurance (ESI) Act. The employees are given the benefits if they get unemployed involuntarily. The reasons can be disability rising from injury at workplace and closure of the business. The benefits and other terms and conditions of the policy are revised from time to time. This is the policy made for the benefit of Indian youth keeping into mind the rising unemployment in the country.
Features of RGSKY
- The individuals who have three years of experience under the ESI Act are eligible for availing benefits under the RGSKY
- The allowances are provided for a maximum duration of 1 year
- The insurance claim is to be made within 6 months of getting unemployed
- There is a provision for medical benefits to the insured and his/her family during these 24 months
- The allowance provision ceases as soon as the beneficiary gets employed
Unemployment insurance is not something a privately held insurance company can provide, especially because of the rising rate of unemployment. The government has to take initiatives in this matter. Though policy was introduced in 2005, it has not reached the common people, where the awareness is most required.