Emerging issues on Social Security, Discussed at the 73rd HR Kurakani

Category: HR Insider | Date: | Total Views: 3789

The 73rd HR Kurakani, organized by Real Solutions was held on November 28, 2018 at the premise of Real Solutions, Minbhawan, New Baneshwor, to discuss on the topic of "Emerging issues on Social Security".  It was attended by 35 HR professionals from various organizations in Nepal and was moderated by reputed practitioner of HR- Mr. Manoj Giri. The Kurakani highlighted insight of the newly unveiled system of Social Security where HR practitioners from different organization shared their views.

Social Security Scheme

Social Security is a means of taking care of people, especially vulnerable ones like the old, the sick, the disabled, the unemployed and children, in terms of providing them with food, shelter and healthcare, thus promoting their well-being. The Social Security Act is enacted as per the social welfare concept, in accordance with which the people have rights to welfare of various kinds as one of their fundamental rights as stated in The Constitution of Nepal-2015. 

The government unveiled the contribution-based social security scheme for formal sector workers on November 27, 2018, where tens of thousands of private sector workers and their employers will contribute to a common fund - Social Security Fund, every month. The Ministry of Labour, Employment and Social Security stated that the scheme will be compulsorily applied for formal sector workers and the government will soon launch the scheme for informal sector workers as well.

The MoLESS have instructed all the formal sector enterprises to register their entities in the SSF system by February 22 and to submit their employees’ data before May 21. Even the self-employed can take part in the Fund. After the registration the employer will be given a registration number, whereas each employee will get a social security number.

Key Points of SSF:

  • The social safety fund will start accumulating monthly instalments on May 22, in which the employees will have to mandatorily contribute 11 percent of their basic salary to the fund and, the employers will have to contribute another 20 percent of the employees’ basic salary. 
  • Once these contributions are made, personnel will be entitled to old age pension, medial treatment, health protection, maternity coverage, accidents and disability compensation.
  • Once the social security scheme is launched the formal sector will have to mandatorily transfer funds deposited in Citizen Investment Trust and Employees Provident Fund to the SSF.
  • SSF will allocate 3.22 percent of total funds collected for medical treatment, health and maternity security and 4.52 per cent for accident and disability security.
  • It will allot 0.87 per cent for dependent family security and 91.39 per cent for old age security in the name of the pension.

Guidelines to the Availment on Schemes of Social Security Fund:

  • Medical Treatment Scheme: To avail medical treatment scheme the contributor must have deposited their instalment regularly in the Social Security Fund for at least six months. To avail health and maternity security, the contributor must have worked for 18 months and regularly deposited instalments for at least 12 months.
  • Accident and Disability Security Scheme: Can be availed by workers a day after they deposit their first instalment. 
  • Old Age Protection Scheme: Workers aged over 60 will be eligible for pension 15 years after they start regular contribution to the fund.
  • Dependent Family Protection SchemeAlong with workers, their spouse, children and parents can also access the facilities in case of the contributor’s death. Deceased worker’s spouses will get a monthly pension equivalent to 60 percent of the worker’s basic salary for a lifetime. The children will get 40 percent of the parent’s monthly salary till the age of 18 as an educational assistance. If the deceased worker does not have a spouse or children, the parents will get 60 percent of the worker’s monthly salary until they survive.

(The Fund will be authorized to operate other schemes as and when required. It can also introduce other schemes based on the nature of work and the requirements of the contributors.)

Obstacles to the implementation of the SSF

The participants at the Kurakani took to discussing each of the scheme’s introduced by SSF in detail and agreed that their implementation will help ensure workers’ social security and create an investor-friendly environment in the country. In the discussion, it was agreed upon that the implementation of the social security scheme is a much-needed step towards dignifying the Labour sector. It will secure the workers’ future and will promote dignified Labour practices in the country.

As it is a new concept, all the stakeholders agreed that the government should take extra caution so that the scheme will not awry under any circumstances. It is equally important to make sure that the benefits of the scheme go out to the genuine people, ensuring that it doesn't fall into the wrong hands. Adding up to the Kurakani, it was discussed that the main strength of this scheme is the provision against offenders and full government guarantee. "In case the Fund fails to work, the government will step in and take over its assets and liabilities. Thus, the Fund is fully secure.” they added.  

Search, Apply & Get Job: FREE