Definition: Social insurance schemes
Social insurance schemes are schemes in which workers are obliged, or encouraged, by their employers or by general government to take out insurance against certain eventualities or circumstances that may adversely affect their welfare or that of their dependants (§ 4.88).
Social insurance schemes are schemes in which social contributions are paid by employees or other individuals, or by employers on behalf of their employees, in order to secure entitlement to social insurance benefits for the employees or other contributors, their dependents or survivors. Social insurance schemes cover social risks or needs . Unlike social assistance benefits, social insurance benefits are conditional on participation in a scheme.
Social insurance schemes are often organised collectively so that those participating do not have to take out individual insurance policies in their own names. However, some social insurance schemes may permit, or even require, participants to take out policies in their own names. Individual policies are treated as part of a social insurance scheme if they cover social risks or needs and if at least one of the following three conditions is satisfied:
a) participation in the scheme is compulsory either by law or by the conditions of employment,
b) the scheme is operated on behalf of a group and restricted to group members, or
c) an employer makes a contribution to the scheme on behalf of an employee (Annex III - Insurance).
Eurostat, "European System of Accounts - ESA 1995", Office for Official Publications of the European Communities, Luxembourg, 1996