India secures 3-year exemption from social security contribution for domestic workers in UK

New Delhi, May 6 (PTI) India has secured a three-year exemption from social security contributions for domestic workers who are temporarily in the UK and their employers under the Double Contribution Convention Agreement (DCCA).

India and the UK on Tuesday announced conclusion of this agreement along with the free trade pact.

The agreement will lead to savings of around 20 per cent of salary, an official said, adding it is expected to benefit more than 60,000 employees from IT sector alone.

The benefits to Indian companies and employees would exceed Rs 4,000 crore.

According to the commerce ministry, the agreement will make Indian service providers significantly more competitive in the UK.

"In an unprecedented achievement, India has secured an exemption for Indian workers who are temporarily in the UK and their employers from paying social security contributions in the UK for a period of three years under the Double Contribution Convention," it said.

Presently, Indian professionals working for a limited period in Britain contribute to their social security funds, but are not able to get their benefits as they return once the projects are complete.

It was a long-standing demand of Indian businesses operating in Britain to cut down on the additional cost burden associated with bringing in skilled Indian professionals on a short-term basis.

The compulsory National Insurance (NI) contributions of skilled Indian professionals in the UK on temporary visas remain an additional cost burden of about 500 British pounds per employee a year, over and above all other taxes and health surcharge paid towards the National Health Service (NHS), as per 2021 data.

India has social security agreements with countries like Belgium, Germany, Switzerland, France, Denmark, South Korea, and the Netherlands.

Thus, Indians going abroad for employment are not required to contribute towards social security schemes in these countries.

They and their employers can continue with social security schemes run by the Employees' Provident Fund Organisation (EPFO) here in India while serving abroad. PTI RR HVA