The government runs a social security scheme that covers around 500,000 formal workers in selected industrial
establishments.8 The scheme, managed by the Ministry of Labor, first came into effect in 1956 in the Yangon area and
was then extended in stages to areas with a significant number of industrial workers. It is financed by contributions
from the employees themselves (who pay 1.5 percent of their wages) and their employers (who pay 2.5 percent
of the worker’s wages). All workers employed in covered establishments are compulsorily insured irrespective
of the type and nature of their employment (whether they are wage earners or salaried workers or permanent or
temporary) and of the level or form of their remuneration. Apprentices and trainees are also compulsorily covered.
The system is administered by the Social Security Board, which registers employers and employees in covered
establishments, collects contributions, pays out cash benefits, and provides free medical care to contributors. No
formal pension scheme exists, and the government encourages its citizens to rely on their extended families for
care in their old age. However, a programme called Houses for the Aged has been established to provide care for
those in need. Free medical care, employment injury benefits and cash benefits are the main responsibilities of the
social security scheme. For workers not covered by the social security scheme, the Workmen’s Compensation Act
places liability for compensation for work accidents on each individual employer. The Act covers personal injuries
resulting from employment accidents and occupational diseases.