The contribution-based social security scheme for formal sector workers has been unveiled by Prime Minister KP Sharma Oli amidst a special programme in the capital on November 27.
Quoting the Ministry of Labour, Employment and Social Security, the scheme will compulsorily be applied for formal sector workers and the government will soon launch the scheme for informal sector workers as well.
Speaking at the program, Prime Minister Oli said, “It was important to strengthen the system in which the state is accountable to its people. This scheme has been introduced to that end.” He added that introducing the social security scheme would add a new dimension to the approach through which labor would be respected and everyone would be encouraged to work.
The Prime Minister, quoting RSS, further stated that people of all ages and categories would be included in the scheme and no-one would be excluded, guaranteeing security to all.
According to the scheme, from May 22, private sector employees will have to mandatorily contribute 11 per cent of their basic salary to the fund, while employers will have to contribute another 20 per cent of the employees’ basic salary.
Once these contributions are made, employees will be entitled to compensation if they lose a job or cannot attend the workplace because of pregnancy, illness or accident.
As per the scheme, of the total fund collected, SSF will allocate 3.22 per cent for medical treatment, health and maternity security, and 4.52 per cent for accident and disability security. Likewise, it will allot 0.87 per cent for dependent family security and 91.39 per cent for old age security.
As per law, both employers and employees will have to mandatorily deposit their instalment for the scheme and it is applicable for all types of workers. The scheme is in accordance with the Contribution-based Social Security Regulation.
The unveiling of the scheme coincides with the first Social Security Day being marked today.