Social insurance is any governmental-sponsored programme in which the benefits, eligibility requirements of the programme are defined by the statute. The programme if funded by the taxes paid by or on behalf of the contributors and it serves a defined population and participation is either compulsory or the program is heavily subsidized that most eligible individuals can become members and remit their contributions. The contributions are used by the government to fund public programs (Henry, 1980)
The government uses the social insurance to fund the public programs that are meant to take care for the welfare of all people, even those who are not contributing. The funds finances the family benefits, housing allowance and disability allowance to help those who are unable to contribute. The returns on the unemployment insurance contributions paid by persons who are not members of unemployment funds are used by the government for financing basic unemployment allowances.
The social insurance institution is responsible for basic unemployment provision and it is the responsibility of the government to use the funds from social insurance to deal with unemployment (Salisbury, Larson, Edelman, 2002) The government through the Ministry of Health and other stakeholders’ finance and offer health care services using the social insurance. The services are accessible to those who are members and non members. The National Hospital insurance fund takes care of this aspect and is a government entity which supports the health care of the people.
The workers compensation is also important as it protects the workers when on duty. The government uses funds from social insurance to pay for the medical costs incase the employee is injured while working or given some money if the working conditions endangers their lives. In general, social insurance is meant to take care of all people, whether members or not. However, the existing care and support system is not sustainable because of the massive challenge that changing demographics represent for our society (Henry, 1980).