N loader BIL® INVESTMENT
bg-inner.jpg
news.jpg

Govt to start social security scheme on Tuesday

2018-11-23

The long awaited social security scheme for formal sector workers will formally be announced by Prime Minister KP Sharma Oli on Tuesday.

The Ministry of Labour, Employment and Social Security (MoLESS) has said that the scheme will be compulsorily applied for formal sector workers. According to MoLESS, it will soon launch the scheme for informal sector workers too. The scheme has been based as per the Contribution-based Social Security Regulation.

According to Mahesh Prasad Dahal, secretary at MoLESS, in the first phase the scheme will cover medical treatment, health and maternity security scheme. It will also cover accident and disability security scheme; dependent family security scheme; and old age security scheme.

“We will release the individual contributor code for easy identification but there is still some work left regarding data integration,” he added.

As per Contribution-based Social Security Regulation, to avail medical treatment scheme the contributor must have deposited their instalment regularly in the Social Security Fund for at least six months. Similarly, to avail health and maternity service the contributor most have worked for 18 months and regularly deposited their instalments for at least
12 months.

Meanwhile, the accident and disability security scheme can be availed by workers from immediately the next day after they deposit their first instalment. Moreover, workers can also receive compensation if they are injured in the workplace or develop medical complications due to their work condition, however the worker must have worked for a minimum of two years and deposited all instalments on a regular basis.

According to MoLESS, a worker who has fulfilled the above mentioned criteria will be eligible to receive a maximum of Rs 700,000 from the fund if they are affected by any aforementioned cause.

However, workers will not be eligible to receive any compensation if they lose their lives due to a natural disaster, or a road accident not related to the job, or if the worker is eligible to receive compensation through any other insurance scheme.

Employees working in the formal private sector will be entitled to these benefits based on the contribution made by them and their employers. It is mandatory for private formal sector employees to enrol themselves in this scheme. They may be penalised if they fail to make the contribution. The contributions they make will go to the Social Security Fund, which is operated by MoLESS.

As per regulation, if the worker dies, then the fund will provide 60 per cent of the respective worker’s basic salary as pension to the family members who were dependent on the worker on a monthly basis. It will also provide 40 per cent educational scholarship every month for children below 18 years of age.

Regulation also states that if the worker does not have a spouse or an offspring then the pension amount will be given to the worker’s parents. Also, if a worker retires from his/her work, then the fund will provide the worker the 60 per cent pension amount till they are alive.

“This scheme will benefit those who are employed in the formal sector. Staff will get compensation even if they cannot attend the workplace due to illness or accident,” informed Dahal.

The government has been levying one per cent social security tax on basic salaries of all private sector employees to raise the money required to operate the Social Security Fund. At present, the fund has deposit worth Rs 20 billion.

From Tuesday, private sector employees will have to mandatorily contribute 10 per cent of their salary to the fund, while employers will have to contribute another 21 per cent of the employees’ salary. Once these contributions are made, they will be entitled to compensation if they lose a job or cannot attend the workplace because of pregnancy, illness or accident.

According to MoLESS, it will start collecting data of formal sector workers in Province 3 from December 1, in Province 1 from December 16 and in Province 2 from December 30. Likewise, data collection for Gandaki Province and Province 5 will
start from January 15 and for Karnali Province and Province 7 it will start from January 29. However, the government has already started collecting data of Kathmandu Valley since November 22.

Source: The Himalayan Times