Agrahara Insurance scheme benefit cuts for pensioners

The Agrahara Insurance scheme for public sector employees including pensioners has pruned its benefits to retirees after taking measures to include all public servants in the scheme -- even after their retirement - before 2016.

The Cabinet of Ministers has approved a proposal by Prime Minister Mahinda Rajapaksa recently to extend the Agrahara insurance scheme to some 600,000 public sector pensioners, improve their access to healthcare and work to remove pension discrepancies.

Under the earlier system only public sector officials who retired after 1 January 2016 were eligible for the Agrahara insurance scheme, which was about 10 percent of the overall number of retired state sector pensioners. The specialty of the insurance scheme is that this covers all medical services and entitlement to benefits for a lifetime without an age limit. Heart surgery at a private hospital, cancer, kidney, liver and brain surgery are covered under this insurance, according to the proposal.

However the Public Administration Ministry has taken a decision recently to cut down Agrahara’s medical insurance scheme benefits and some amount from claims of retirees while completely removing the natural death donation cover and accidental death cover.

It has also been suggested to increase the monthly deduction as a contribution for the insurance scheme from the pension payment to Rs. 400 from Rs. 200 for retirees in the age group of less than 70 years and no change has been made to the contribution of Rs. 600 levied from pensioners of over 70 years.

This was another initiative taken on the directives of the Finance Ministry towards further pruning recurrent expenditure for public sector employees by way of cutting the additional payments of state employees numbering over 1.5 million.

The newly proposed insurance cover for Cataract Surgery is Rs.25,000. Brain surgery cover will be Rs. 500,000 and Kidney transplant Rs.500,000. A sum of Rs.75,000 will be given for the admission to government hospital paying wards.

The insurance cover given for the admission to a private Ayurvedic hospital treatment has been reduced to Rs.75,000 from Rs. 120,000.

Rs. 300 billion will be borne by the Treasury as pension benefits for the Public Service Officers for 2021 and Rs. 35,500 million for the pensions of widows, widowers and orphans. Rs. 26,367 million of the amount was spent by June 30, 2021 and an additional Rs. 19,000 million is required.

The Cabinet, therefore approved a grant of Rs. 19 billion under the vote of the Department of Pensions through the special rules authority permit ( supplementary) signed by the Finance Minister.