Global

Disability Benefits in India

India’s continued economic success has made it a regional hub for many multinational employers. However, navigating the country’s complex benefit environment can be a challenge for many employers. Below, learn what statutory and supplemental disability benefits are currently available.

January 09, 2020

Statutory Disability Benefits

STD (ESI)

Sickness benefits commence after 2 days of absence due to sickness and are payable for a maximum of 91 days in two consecutive 6 month benefit periods (Jan 1 to Jun 30 and Jul 1 to Dec 31).
Eligibility: Employees of factories with 10 or more persons, earning monthly wages of INR21,000 or less

LTD (EPF and EPS)

EPF – Accumulated funds in the member’s account.
EPS – Disability pension would be (with a minimum of INR1,000 per month) equal to the pension that would have been payable should the employee have retired on the date of disability.
Eligibility: All employees earning up to INR21,000 per month are eligible.

Supplemental Disability Benefits

For 92% of companies, STD and LTD are riders of AD&D, but only pays out for accidents. AD&D is part of group personal accident plan.
All employees are eligible for all 3 benefits with employer paying for the cost.
STD: Benefit is payable in terms of weekly pay, usually capped at INR10,000 per week. Maximum coverage for STD is 104 weeks.
LTD: Usually a percentage of capital sum insured is payable, depending on the severity of the disability. The policy terms clearly specify the possible pay out.
AD&D: Benefits typically range from 12 to 60 times’ monthly pay. The most common provisions are 24 or 36 times monthly pay (or 2 or 3 times gross annual salary, including all components). Some companies provide a fixed lump sum amount at a median of INR1,000,000.