Social security program for informal sector workers and self-employed launched

The Social Security Fund (SSF) has launched a contribution-based social security scheme for informal sector workers and self-employed. Prime Minister Pushpa Kamal Dahal, on Wednesday, unveiled the program which will now enable Nepalis working in the informal sector and self-employed Nepalis to be part of SSF.

With this, four sectors—formal sector, foreign employment, informal sector, and self-employed have joined the SSF. There is a provision in the Social Security Fund Act that workers in the informal sector and self-employed persons can join the SSF. Workers in the informal sector include those working in the agricultural sector, construction sector, and those whose employer is not fixed.

Launching the new program, Prime Minister Dahal said that the launch of the scheme for informal sector workers has given a message that no one will be left out of the scope of social security in Nepal. “In that sense, he said, this day should be considered an important historical day for the establishment of labor rights,” said Dahal.

According to Dahal, all the workers working in the informal sector will gradually participate in the scheme. Dahal said that the social security scheme would be run as an intensive campaign by integrating it under the integrated concept. “The fund is an important mechanism of the state for neglected, suppressed, and oppressed people of the society,” he said. 

As per the SSF procedure, an agreement can be made through the local level to include workers in the informal sector and self-employed persons in the fund. Based on this arrangement, two local bodies—Phendi Khola Rural Municipality of Syangja and Bhimphedi Rural Municipality of Makwanpur have already started enrolling informal sector workers and self-employed in the SSF. 

According to SSF, informal sector workers and self-employed workers can now apply to join the fund. They have to first produce an identity card from the local level as an informal sector worker and self-employed. And, they (informal sector workers) have to contribute a minimum of Rs 2,024 per month. 

As per the procedure, a total of 20.37 percent will be contributed to the fund, of which 11 percent will be from the workers and 9.37 percent will be the supplementary amount provided by the government. However, self-employed persons will have to contribute 31 percent of the minimum wage.

Workers and self-employed persons in the informal sector who join the fund will be able to participate in all kinds of facilities operated by the fund. Contributors will be able to get medical treatment, health and maternity protection, accident and disability and dependent family protection, and old age protection scheme.

The SSF will pay a maximum of Rs 700,000 for the medical expenses incurred in the hospital to the contributor in case of an accident, under the accident and disability protection scheme. 

After joining the SSF, informal sector workers and self-employed workers will get disability pensions, lifetime pensions, and scholarships for their children. 

The contribution-based social security scheme was launched by the then KP Sharma Oli-led government in Nov 2018 with the objective to provide social security coverage to private sector employees.

Though formal sector workers have been receiving benefits from the social security plan for three years back, the SSF started to incorporate migrant workers and self-employed persons living abroad, as well as workers from the informal sector for the first time.