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Agrahara insurance scheme: Government vows benefits despite financial crisis

11 Sep 2021

  • Benefits not revised in spite of increase in health/medical costs: TUs
By Maheesha Mudugamuwa Despite the ongoing economic crisis, the Government last week assured the continuation of welfare facilities provided to all state employees, including the “Agrahara” insurance scheme. Instead of curtailing the benefits, Secretary to the Ministry of Public Services, Provincial Councils, and Local Government J.J. Rathnasiri told The Sunday Morning that the insurance scheme was further extended to all pensioners over 70 years of age, despite increases in the Government’s health budget this year due to the Covid-19 pandemic. He assured that there would be no curtailment or amendments to the existing health insurance scheme or the number of beneficiaries. This assurance, however, is given at a time when the Treasury had requested the curtailment of ministry and state institution expenses, considering the economic challenges that had arisen due to the Covid-19 pandemic. Accordingly, as per a circular issued by the Treasury Secretary on 28 July 2021, which sets out the guidelines for the preparation of the annual budget estimates for 2022 within the medium budgetary framework of 2022-2024, all heads of state institutions were informed to be cautious while preparing the budgetary estimates for the upcoming year. The circular issued by the Treasury Secretary on 28 July 2021 further states that the salaries and wages and other allowances for the year 2022 should be calculated separately for each individual based on the actual cadre as of 1 July 2021. The circular calls for accurate information from the institutional level, and since recruitment will be discouraged in the year 2022, further provisions will not be allocated for the same. Other than the provisions for rates already approved, overtime and allowances should not be included in the estimates for any other type of overtime or allowances. Since many new recruitments to the public service were carried out during the last few years, technological tools were used extensively, and online methods were initiated due to the pandemic situation, overtime payments should be estimated by deviating from traditional methods by reviewing the relevant requirements, it is stated. Responding to our query, Rathnasiri stressed that neither the Ministry nor the institutions under the Ministry had decided on what expenses would be curtailed. However, he added that welfare facilities provided would not change. However, state employees allege that the benefits were not revised by the fund, despite their medical expenses having increased drastically during the past few years. Development Officers’ Service Union (DOSU) Secretary Chandana Sooriyaarachchi told The Sunday Morning that there were several issues with the Agrahara insurance scheme in the case of Covid-19 hospitalisations, which they had raised a few months ago. “There has been a delay in receiving insurance claims from Agrahara, and the scheme was not upgraded despite health expenses increasing drastically,” he stressed. When contacted, National Insurance Trust Fund (NITF) Assistant General Manager – Insurance Nimali Pathirana told The Sunday Morning that no further amendments to the Agrahara insurance scheme were to be introduced at present. Restructuring welfare schemes The Treasury had also informed the ministries and state institutions to restructure its welfare programmes/projects implemented through government funds by reviewing the same in the context of the Covid-19 pandemic situation, in order to accurately identify the beneficiaries and avoid duplication of subsidies. The institutions were requested to control unnecessary administrative expenditure on delivering subsidies/benefits by conducting proper reviews. The circular stated that a summary of the number of beneficiaries should be prepared in estimating the expenditure for development subsidies and welfare expenditure, thereby enabling the easy identification of the subsidy provided for each beneficiary under each programme or scheme. “Chief accounting officers are responsible to avert estimation of provisions for expenditure under Object Code 1504 (Development Subsidies) and Object Code 1501 (Welfare Programmes), except for approved programmes by any law or by the Cabinet of Ministers. Similarly, ongoing subsidy and welfare programmes shall be limited to the beneficiaries already approved, unless otherwise decided by the Cabinet of Ministers,” it is stated. Steps should be taken to integrate programmes implemented by the central government and provincial councils to direct the welfare expenditure only for the most deserving cluster and to ensure ineligible people are excluded from receiving benefits. Chief accounting officers should also develop a method to ensure the direct receipt of the benefits by the beneficiary themselves, such as through a bank account or any other method, the circular further notes. Cabinet approval was given on 30 August to implement a previous decision to provide benefits under the Agrahara insurance scheme to public servants who retired before 1 January 2016. Minister of Education and Leader of the House Dinesh Gunawardena stated that this is a significant step towards making it possible for 271,551 persons who had retired from the public service before 1 January 2016 to receive the Agrahara insurance benefits. The first cabinet memorandum in this regard was tabled on 7 July 2020. It received cabinet approval on 22 July 2020 and was also approved by the NITF Board of Directors. Prior to that, the Agrahara insurance scheme was in operation only for public officers who retired after 1 January 2016. Introducing the ‘Agrahara’ insurance scheme in SL The “Agrahara” insurance scheme was introduced through the Ministry of Public Administration Circular No. 5/1997, and this scheme fell under the purview of the National Insurance Trust Fund (NITF) from 1 January 2006. The main idea of the scheme was to uplift the living standards of members of the public service and provincial public service and their families. The NITF caters to nearly 1.5 million public servants and their dependents, and covers their medical expenses (hospitalisations, childbirth, operations, spectacles, etc.) as well as accidents and death claims submitted by the beneficiaries or their families. The scheme was introduced in 1997 through Circular No. 5/97 of 31 January 1997 issued by the Ministry of Public Administration and Home Affairs. Uplifting the livelihoods of all permanent and pensionable public and provincial public officers and their family members was identified as the main objective of the scheme. Contributions were made via government accounts for this scheme, which was compulsory for public officers. Under this scheme, an officer can obtain private accident insurance and a loan security insurance coverage by paying a monthly premium of Rs. 11, if they so choose to. This transaction was operated by the Public Service Insurance Department of Sri Lanka Insurance Corporation Ltd. (SLIC).


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