MY VIEW: Here’s How Your Hired Help Can Get Pension, Healthcare & Insurance at Rs. 700 per Month

Jidesh Haridas lists four simple things you can do to ensure the financial security of your domestic help.

I have a cook and a maid at home, and a caretaker in the building I live in. They are some of the most sincere people I have met, and it is for this very reason that I have always loaned them money whenever they needed it. But I have also come to realise that they are never debt free.

The moment one cycle of repayment ends, another begins. Whether it is to pay their children’s school fees or to clear their medical bills or even to make essential purchases, they are forced to borrow money again as they often have no savings or simply because their husbands drink away all their money. I suspect that a lot of you reading this will probably relate to this.

This is what led me to research the different ways we can help our hired help, aside from just lending them money and perpetuating the cycle of loans and repayments. I came across quite a few government schemes which I am sure will prove to be incredibly beneficial to them.

In this post, I would like to outline a few simple things that I have done for the people who work for me. If each of us can do the same and share this with others, it is possible that we will make a big difference in the lives of those in our employ.

1. Opening a Bank Account

Image source: Pixabay

Help them open an SBI account with internet banking facilities. I specifically mention SBI and internet banking as this will help make enrolment into some of the social security schemes I mention later, easy.

You will need to spend some time to do a one-time registration, after which you can directly transfer their salaries into their account.

This one step alone addresses three issues:
i. It ensures their financial inclusion
ii. It helps them save some money from husbands who might spend their salary on alcohol
iii. It also helps boost their credit rating. Should they require a loan from the bank in the future, a good credit rating will work in their favour.

2. Term Insurance

Image source: Pixabay

Given the nature of their jobs and the fact that most of them have dependents, some kind of term insurance is vital. There are two schemes that could prove to be extremely beneficial to them:

i. The Pradhan Mantri Suraksha Bima Yojana (PMSBY)
This scheme has a premium of just Rs. 12 per annum and covers injuries and accidental deaths.
ii. The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
This scheme has an annual premium of Rs. 330 only.
You can learn about the difference between the two schemes at this link.

I would recommend enrolling them for both. When you log-in to SBI, you will find a link called ‘Social Security Schemes.’ Click and apply for the schemes. By paying a total of Rs. 342 per annum, your domestic help will have an insurance cover worth an impressive Rs. 4 lakhs.

3. Pension

Image source: Pixabay

This is going to be your toughest sell as the idea of saving something now, to benefit from it at the age of 60 is still an alien concept to most. But it is a crucial step to ensure their financial security.

The Atal Pension Yojana is perfect for this. With a monthly contribution of Rs. 577, someone who is 30 years old now can get a monthly pension of Rs. 5000 when they turn 60.

You can find more details at this link APY Premiums.

Applying for this scheme with an SBI account is very easy. One need only go to the ‘Social Security Schemes’ link mentioned above to apply.

4. Health

Image for representation only. Source: Wikipedia

Unaffordable healthcare is one of the primary reasons for the perennial cycle of debt most hired help fall victim to.

The Rashtriya Swasthya Bima Yojna (RSBY) is a government scheme that could help combat this with an annual premium of just Rs. 50. However, this scheme is only open to citizens below the poverty line. In some places, enrolment in the scheme has also been stopped – as is the case in Bengaluru. You can check the status of the scheme in your state at this link.

Even if the RSBY is not applicable, I would urge you to enrol your domestic help in other insurance schemes to help them deal with the rising costs of healthcare in the country. Here are some schemes you can consider:

i. Swavlamban, offered by The New India Assurance Co Ltd, is a good scheme to go with if your hired help, or any of their family members, are physically or mentally challenged. The scheme offers a cover of 2 lakhs for a premium of Rs. 355 per annum. The scheme does not offer an online enrolment option, but considering that few schemes include differently abled individuals, it is worth the effort of applying offline.

ii. A family floater plan is also a good option, since it will cover all dependents.

Family floater plans by private firms can prove to be uneconomical. Even if you are willing to foot the bill for them, it would be best not to sign them up for an expensive policy since their next employer might not do the same.

Janata Mediclaim Policy was the cheapest family floater policy I could find. It has fixed covers of Rs. 50,000 and Rs. 75,000 with the latter working out to Rs. 1050 per month for individuals below the age of 35.

If they can afford it, the IFFCO-TOKIO Family Floater Plan is another good scheme which offers a cover of Rs. 2 lakh for a family of four with a premium of approximately Rs. 4000 per annum. This plan can be purchased online.

iii. While it is very likely that your hired help has dependents above the age of 60, few policies cater to this age group and the ones that do are quite expensive. The best among the lot seems to be Senior Citizen Mediclaim Policy, but even that has a minimum premium of Rs 4000 a year for a cover of Rs. 1 lakh

If you offer your domestic help increments and bonuses every year, do try and educate them about the benefits of channelling this excess income into the above mentioned schemes. With just Rs. 700 per month, a 30 year old hired help can get a pension of Rs. 5000 per month, with a term insurance of Rs. 4 lakhs as well as a health cover of Rs. 75,000.

– Jidesh Haridas

Disclaimer: I have no vested interest in promoting SBI, New India Assurance Company or IFFCO-TOKIO.

Featured image for representation only. Source: Expats in India

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