The Social Security Fund (SSF) has collected more than Rs 4 billion from employees and workers in the last five years, but it has not been able to do anything with the money as the Social Security Act 2011 is yet to be promulgated.

The dissolution of the Constituent Assembly (CA) in May 2011 halted preparations to introduce the act, and its absence has prevented the SSF from launching any social security schemes. “Parliament is necessary to make laws. Unfortunately, we have no Parliament, so we have been unable to introduce the social security programme,” said Kewal Prasad Bhandari, executive director at the SSF. As a result, the Rs 4.4 billion collected from employees and workers under a compulsory contribution scheme is not being spent on any intended tasks. 

According to the SSF, there are 1 million contributors to the fund currently. The government collects a 1 per cent tax on the employees of both the public and private sectors to finance a universal social security scheme. Since the plan was unveiled through the 2009-10 budget, the government has been promising to implement a social security programme. The budget for the current fiscal year has also talked about introducing a scheme to cover maternity expenses, workplace hazards and medical treatment. The fund has envisioned introducing another five plans including unemployment insurance, dependent insurance, disability insurance, old-age insurance and family insurance.

However, Bhandari said that these programmes could not be implemented as there was no act. According to him, the SSF had sent a draft act to the cabinet for approval, but the CA-cum-Parliament was dissolved before it got there.

Meanwhile, disagreements have emerged between private sector employers and trade unions over whether a new Labour Act and Social Security Act should be introduced in a single package. Employers have been saying that there should be a hire and fire provision in the labour law before they will contribute to the SSF.

As the SSF has not been able to introduce any social security programme, it is planning to buy software to create a database of its contributors. “We will require a highly sophisticated data collection and storage centre with adequate security, and we are looking for such software,” said Basanta Panthi, section officer at the SSF.

 Published on: 26 October 2013 | The Kathmandu Post