Securing the future of your domestic help
Recently, a large number of domestic helps in Thane hit the streets, demanding better social security measures. They demanded fixation of minimum wages, pension, gratuity, free education to children, free medical benefits, weekly offs and annual sick leave of 15 days.
India has about 90 million domestic workers, comprising maids, servants, nannies, drivers and other such workers, according to 2008 estimates.
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Unlike employees in the organised sector, domestic helps have no financial security their working conditions remain unregulated and their segment is excluded from the scope of labour legislation. In the absence of labour laws and social security measures, they have no right to workers’ compensation, weekly holidays and minimum wages.
In such circumstances, what can you do to help your domestic help get social security? Is it all about paying for your maid’s insurance premiums or opening a savings bank account for her? It is much more than that. And, tougher too, says Sarojini Shah, who works with a Delhi-based NGO. “Because even if you wish to extend financial help at your level, your maid should have the required documents, which she may not have most of the times."
Tukaram Bhandkoli, who works with Gharelu Kamgar Sangh, affiliated to the Bharatiya Mazdoor Sangh, says of the 500 domestic helps registered with them, only 20-25 have a bank account. “They don't have access to basic social security because they don't have the required residential proofs. We have requested the government to relax some rulings for this segment, so that they get some identity proofs."
Most domestic helps are left with nothing much to save. Those who have some money prefer to send it to their home towns, to take care of their ancestral properties such as farms and lands.
Most government schemes don't benefit the domestic help because these are offered in the villages and small districts. To take advantage of these schemes, the person concerned needs to be available in the village where his name is registered. As domestic helps have pan/ration cards affiliated to the village, they cannot take advantage of these schemes from the cities they have relocated to. Government-run insurance schemes are not yet launched pan-India, another disadvantage.
After working at seven houses, Savita Ghatge barely earns Rs 4,200 a month. But most of her savings were spent recently when she contracted pneumonia and had to go to a hospital. This happened because she was not aware of the insurance schemes offered by the government. Most domestic workers are not aware of the schemes. Even if they are, procedural issues stop them from taking advantage of these.
The Rashtriya Swasthya Bima Yojana (RSBY), launched by the ministry of labour and employment, is one. It provides health insurance coverage for BPL (below poverty line) families. But, this segment misses on this opportunity as most of them don’t fall under the BPL category. The reason: People falling under the BPL category, with an income of less than Rs 15,000 per annum, have yellow ration cards.
Mukesh Kumar, head-HR, marketing and strategy planning at HDFC ERGO, says, “RSBY enrollment happens on the basis of data available with the government, which would identify them as residing in their hometown. But, most of the domestic helps are away from their home towns for work and, hence, are not enrolled (by virtue of being absent at the time of enrollment)."
Most of them don’t have a permanent address proof as they relocate for work. It is important for them to register their names in the village they come from and be present there when the authorities provide them with a proof. If they relocate to a city, they should try and get a permanent address proof. If they already have a ration card, they should make a permanent account number (PAN), which will give them access to a lot of other financial instruments, such as bank accounts and insurance, too.
In addition, they cannot get enrolled from their place of work as domestic helps are not registered anywhere as workers and would not have any documentation for proof. Therefore, government schemes for workers would not include domestic workers.
While RSBY covers only up to Rs 30,000, state-specific schemes such as the Rajiv Gandhi Jeevandayee Arogya Yojana (RGJDAY) of Maharashtra give free health insurance up to Rs 1.5 lakh. However, most domestic helps cannot take advantage of RGJDAY as it is available only in a few districts and cannot be offered to those who do not have ration cards.
The scheme covers 972 surgeries (cashless treatment) and covers patients earning less than Rs 1 lakh a year. An individual needs to have a yellow/orange ration card in order to take advantage of this scheme. The network hospitals will provide free follow-up consultation, diagnostics, and medicines under the scheme, up to 10 days from the date of discharge.
The Life Insurance Corporation of India (LIC) provides micro-insurance at Rs 50 per annum with sum assured of Rs 30,000. An official from Grahit-Raj Seva Sangha, a Pune-based NGO, says that in case of death, LIC makes claim payment only by cheque. “And with most of my domestic-helps not having a bank account, we cannot make use of this cover."
Future Generali Life insurance offers small ticket term policies starting with an annual premium of of Rs 2,500 for sum assured starting from Rs 10 lakh. Kotak Life and IDBI life insurance give a sum assured of Rs 10,000 and Rs 50,000, where the annual premium payable starts from Rs 100 onwards.
Things would have been different if you had a boss like Balakrishnan V, a Mumbai-based financial planner who has secured the future needs of his domestic helps. He pays a fixed salary per month, and has provided an insurance worth Rs 7 lakh, which includes a personal accident and a family floater health policy. This year, instead of giving Jayesh ( his driver) a salary increment, Balakrishnan invested the amount in mutual funds, with the driver’s consent. “This has made Jayesh more dedicated to work."
In case you wish to extend a helping hand to your maid, you can buy her an insurance policy through Swabhimaanya (www.swabhimaan.com), an insurance portal that has rolled out schemes for domestic helps. The portal has partnered with Bajaj Allianz for life insurance and Future Generali for accident and health insurance. It offers pure protection plans, term accident plans, composite products, and group plans.
An accident cover of Rs 100,000 bought from the portal will cost you a premium of Rs 200 per annum. A life insurance scheme will cost you a premium of Rs 250 per annum for a cover of Rs 20,000. But this pales in comparison with LIC, which offers a Rs 30,000 sum assured just for Rs 50.
One has to upload and submit documents online, which may not work for this segment as the domestic helps are not internet-savvy. Another disadvantage is, the policy holder should have a voting and ration card. However, you can propose the policy for your maid. After uploading documents online, you will be issued a policy offline in eight to 10 days.
Rahul Pagare, CEO and managing director at Swabhimaanya, says, “We sold about 185,000 insurance policies to the bottom-of-the-pyramid clientele." If your domestic help is not aware of these plans, you can help them understand the benefits and ask them to take advantage of the schemes. Financial planners also advise them to avoid taking the pat-phedi route. These are unorganised credit co-operative societies which are not regulated by the RBI. It's usually managed by a group of six to seven members privately.
Shiv Krupa, a Thane-based Patphedi gives a personal loan at 18 per cent as compared to 13 per cent charged by banks. Most domestic-helps open accounts with pat-phedis only by submitting their ration cards, whereas a bank will demand a PAN card and residence proof which most of them don't possess here as they relocate to work in cities. They also offer lucrative deposit rates, but one shouldn't get carried away with this because, if the patphedi shuts its shop there is no way one can claim his money back. Hence, chances of the operators duping the poor are more here and one should not fall prey to such ploys.