This Legal Guide explores Nepal's Contribution Based Social Security Fund (SSF), detailing key schemes including Medical Treatment & Maternity Protection, Accident & Disability Coverage, Dependent Family Support, and Old Age Pensions. It covers mandatory contributions, eligibility criteria, benefits, limitations, and claim procedures to ensure compliance and financial security for employees against illness, accidents, and life uncertainties.
For the latest official information, visit the Social Security Fund website at https://ssf.gov.np/.
Regulating Laws and Administration
Nepal's contribution based social security system is mainly regulated by the following laws:
- Contribution Based Social Security Act, 2018 (2075 BS) (the "Act")
- Contribution Based Social Security Regulations, 2018 (2075) (the "Regulations")
- Social Security Scheme Operation Directives, 2075 (the "Directive")
These laws represent a pivotal move toward a formalized and contribution-based social security system in Nepal.
The system is administered by:
- Ministry of Labour, Employment and Social Security as a line ministry
- Social Security Fund
The main objective is to provide protection to employees and beneficiaries against financial instability caused by illness, accidents, disability, maternity, and old age. Contributions from both employer and employee became mandatory from 17 July 2019.
Contributions are made monthly on basic salary:
- Employer: 20%
- Employee: 11%
- Total: 31%
Applicability
The Act applies to a wide range of employers and employees, ensuring coverage for workers in formal or informal sectors through contributions. Registration with the SSF is mandatory for all businesses or organizations, irrespective of business nature, employment type, or tenure. All employers must enroll employees in the SSF.
It is voluntary for self-employed individuals and informal sector workers. Security agencies such as Nepal Army, Nepal Police, and Armed Police Force are exempted.
The process starts with employer/enterprise registration with the SSF, which issues a unique SSF number. Employees must register within three months of joining, with both employer and employee required to make monthly contributions.
Types of Schemes
The schemes are structured into four primary pillars:
Medical Treatment, Health, and Maternity Protection Scheme
Offers financial support for general medical treatment (outpatient and inpatient care, subject to annual limits and co-payment), allowances for extended sick leave beyond standard entitlements, and maternity benefits covering pregnancy-related medical expenses and lump-sum amounts for newborn care. This ensures financial security during health crises and family expansion.
Accident and Disability Protection Scheme
Aims to provide income security in old age or upon job termination, with significant allocation (28.33% of basic salary: 20% employer, 8.33% employee). It offers lifetime monthly pension for long-term contributors completing 15 years by age 60, while maintaining a Retirement Fund component for lump-sum withdrawal on termination.
Dependent Family Protection Scheme
Provides a financial safety net upon contributor's death, including lifetime pension (60% of basic remuneration) for surviving spouse (conditional on no remarriage or alternative employment), monthly educational allowance (40% of basic remuneration) for dependent children under 18, and lump-sum for funeral expenses.
Old Age Protection Scheme
Designed for retirement income security, providing lifetime monthly pension for contributors with 15 years of service by age 60, plus flexible Retirement Fund (gratuity) withdrawal on termination.
Entitlements, Limitations, and Claim Procedures
Detailed entitlements vary by scheme, with common features including co-payments (e.g., 20% in medical claims), minimum contribution periods (e.g., 3 months for basic medical, longer for maternity/fatal diseases), and requirements for treatment at SSF-affiliated hospitals.
Claims for medical schemes follow direct settlement at affiliated hospitals (SSF pays after co-payment) or reimbursement via SSF office with official forms. Enhanced benefits apply after 60 months of contributions, and dual claims from other insurances are restricted.
Exclusions include certain non-essential treatments, and benefits extend in specific cases like post-employment leave or pensioner contributions.
For compliance guidance, employers should ensure timely registration and contributions to avoid penalties and support employee welfare.
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