ESI: Unemployment Allowance Eligibility Extended Till June,2021 – Workers Can Claim 50% Of Average Wage


Relaxing the eligibility criteria to avail the unemployment allowance under the Employees’ State Insurance Corporation (ESIC), the Centre announced that workers can directly claim 50 per cent of the average wage as against 25 per cent earlier, payable up to 90 days of joblessness, for their loss of employment between March 24 and December 31 in the wake of the COVID-19 pandemic.

The benefits would be payable 30 days after unemployment as against 90 days earlier, ESIC said in a release after a meeting chaired by Labour and Employment Minister Santosh Kumar Gangwar on Thursday.

The Atal Bimit Vyakti Kalyan Yojana, which is run by ESIC and provides for the unemployment allowance, has been extended by one more year to June 30, 2021, the release said, adding that the scheme will be available with original eligibility conditions during January 1, 2021 to June 30, 2021.

The ESIC has also provided for direct submission of claims by the worker covered under the scheme (insured person) instead of it being forwarded by the last employer. “… the payment shall be made directly in the bank account of insured person,” the release said.

The Insured Person should have been in insurable employment for a minimum period of 2 years before his/her employment and should have contributed not less than 78 days in the contribution period immediately preceding to unemployment.

Several industry groups had earlier petitioned the government to tap into its reserve funds of ESIC of over Rs 73,000 crore to help part-pay salaries for the workers affected due to the lockdown post the COVID-19 pandemic but the government had stated that it is not in favour of using the ESIC corpus for wage payments and that it already provides for employees to withdraw a basic sustenance amount from their corpus upon losing their jobs. The government has now relaxed the eligibility criteria for the same.

ESI Act applies to all factories and notified establishments located in implemented areas employing 10 or more persons and is applicable on employees drawing wages up to Rs 21,000 per month (Rs 25,000 for persons with disabilities). In July 2019. The contribution rate under the ESI Act was reduced from 6.5 per cent to 4 per cent(employers’ contribution from 4.75 per cent to 3.25 per cent and employees’ contribution from 1.75 per cent to 0.75 per cent). It covers about 3.49 crore of family units of workers and provides cash benefits and medical facilities to 13.56 crore beneficiaries.

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