Social Security for International Workers through Social Security Agreements under EPF Scheme, 1952 – Information Brochure by EPFO
Advent of Globalisation and Economic liberalization, coupled with changing demographic profile of the world has made International migration of labour inevitable. India, with a large pool of young and technically qualified manpower has emerged as a global reservoir of human capital. This has encouraged mobility of skilled workforce from India to other countries.
Indian professionals working in various countries were required to make the mandatory social security contributions in the countries of their posting. However despite making monetary contributions, such migrant Indian expatriates were deprived of social security benefits in the host country.
The contributions made by such migrant professionals during their stay in the host country were lost as the benefits are not payable before expiry of a minimum qualifying period and return of contribution paid in that country is not available in case of return to the home country.
SOCIAL SECURITY AGREEMENT (SSA)
With a view to protect the rights of migrant workers, Government of India decided to enter into bilateral Social Security Agreements (SSAs). A Social Security Agreement (SSA) coordinates the social security schemes of two contracting states in order to ensure continuity of social security coverage and facilitate extension of benefits to migrant workers, on reciprocal basis.
A SSA generally covers four important provisions namely, ‘ Detachment’, ‘Totalisation’, ‘Portability’ and ‘Equality of treatment’.
(i) Detachment – Indian employees working in countries with which India has Social Security Agreements are exempted from contributing to their Social Security System, provided they are complying with the Indian Social Security System. This exemption is available for a specified period stipulated in the agreement.
(ii) Totalisation – The period of service rendered in SSA country is counted for determining eligibility for pension. The actual pensionary benefits, however, are payable only for the period of contributory service in India on pro-rata basis.
(iii) Portability – Pension benefits are payable without reduction, direct to the beneficiaries choosing to reside in the home country or in any other country.
(iv) Equality of Treatment– Indian Nationals are to be treated equal to Nationals of the host country with regard to applicability of legislations covered under the SSA.
EPFO has been designated as the Competent Institution/Liaison Agency to operate the provisions of the SSAs and for issuing Certificates of Coverage (COC) to the employees of establishments covered under the EPF Act as well as the employees of other social security providers like the Seamen’s Provident Fund, Banks etc., when they are posted abroad in a country having SSA with India
SPECIAL PROVISIONS IN RESPECT OF INTERNATIONAL WORKER
To implement the provisions of bilateral SSAs, enabling provisions for International Worker (IW) were introduced by inserting Para 83 in the EPF Scheme and Para 43A in Employees’ Pension Scheme and given effect from 1st October, 2008.
The special provisions provide for identification, exclusion, membership and benefits in respect of an International Worker.
DEFINITION OF INTERNATIONAL WORKER (IW):
An International Worker (IW) may be an Indian worker or a foreign national as defined under paragraph 2(ja) of the Scheme, 1952
i) An Indian employee having worked or going to work in a foreign country with which India has entered into a social security agreement and being eligible to avail the benefits under social security programme of that country, by virtue of the eligibility gained or going to gain, under the said agreement;
ii) An employee other than an Indian employee, holding other than an Indian Passport, working for an establishment in India to which the EPF & MP Act, 1952 applies;
COVERAGE:
Every International Worker (as defined in para 83 of the EPF Scheme, 1952), other than an ‘excluded employee is required to be a member of the Employees’ Provident Fund from the date of joining of the EPF covered establishment. Excluded employee in case of International Workers are of two categories:
♦ National of a SSA country duly issued with a COC by his/her home country
♦ Singapore nationals who are contributing to the Social Security system of their home country (in accordance with India Singapore CECA 2005}
The following 20 Social Security Agreements have been signed by India till date. Various benefits available under the SSAs are mentioned in the table below the link
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