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Social Security Schemes Operational Directives, 2075 (the “Directive”) which was approved by the Ministry of Labor, Employment and Social Security on November 22, 2018 (2075/08/06), was amended for the first time on July 14, 2019 (2076/03/29). On February 11, 2021 (2076/10/29), the Directive was amended for the Second time.
The changes brought by the new directives have been incorporated in the following comparison table.
Comparison Table
| S.N. | Section/Issue | Previous Provision | Key Amended Provision |
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Grace Period for coverage of Medical Treatment, Health and Maternity Protection Scheme (Sec. 4)
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Section 4(1): Contribution for at least 3 months required to be eligible for medical treatment and health safety scheme. | Contribution must be made for at least 3 months continuously in order to be eligible for medical treatment and health safety scheme. The word “continuously” has been added. |
| Section 4(2): No provision | The period of three month shall be calculated from Day 1 of the month in which the employee has started contributing the amount to SSF.
In case a contributor stops contributing in SFF after completion of three months, such contributor will be able to receive the benefits under the Medical Scheme after he/she contributes in SSF for a period of three months continuously. |
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Benefits under Medical Treatment, Health and Maternity Protection Scheme (Sec. 5) | The Medical Scheme covered following expenses incurred for contributor or contributor’s spouse:
(a) regular pregnancy test expenses, (b) hospital admission and surgery costs (c) treatment expenses of child for three months.
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The Medical Scheme shall now cover following expenses incurred for contributor or contributor’s spouse:
(a) regular pregnancy test expenses, (b)costs for hospital admission for and pregnancy related surgery and treatment (c) expenses incurred during delivery at hospital, (d) treatment costs after delivery for upto six months, and (e) treatment cost for child upto three months. |
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Limitation of Benefits (Sec. 6)
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Section 6(3A): No Provision | Any contributor who has received treatment benefit of NPR 25,000 p.a. for treatment without being admitted to hospital as per the prescription of doctor under Section 6(3) is also eligible to receive benefits prescribed under Section 6(1) of Directive. Section 6(1) of the Directive mentions of the entitlement of contributor to receive medical expenses incurred while being treated in hospital for an amount not exceeding NPR 100,000 p.a. |
| Section 6(4A): No Provision
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Section 6(4A) of Directive is an addition to Section 4. It states that the contributor is entitled to receive medical expenses benefits not exceeding NPR 100,000 in a fiscal year. The term “year” has been clarified to mean “fiscal year” in the amendment. | ||
| Section 6(6) : Contributors receiving health benefits under this Scheme are not prevented from obtaining any other health related benefits from Nepal Government or under any other insurance schemes. | The amendment has added an exemption to the existing provision. It states that contributors receiving health benefits under this Scheme are not prevented from obtaining any other health related benefits from Nepal Government or under any other insurance schemes.
However, the contributor cannot obtain dual benefits from SSF if he/she has already received payment for the same treatment from any other insurance policies by submitting same bill. |
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| Section 6(7): No Provision | The rate of payment of benefits under Medical Scheme shall be as per the Procedure on Selection of Medical Institutes and Payment of benefits under the SSF Schemes, 2076 (the “Procedure”). Further, if the claimed rates is less than the rates prescribed under the Procedure, SSF shall verify the bill and pay for the claimed amount. | ||
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Exclusions of benefits
(Section 8(C1) |
No Provision | Costs incurred for Abortion done in violation of the prevailing laws shall not be covered under this Scheme. |
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Contribution and Benefits during Pension Period (Section 8A) | No Provision | Any contributor receiving pension on a monthly basis pursuant to the Directive can continue his/her contribution in the rates prescribed by SFF from the pension amount. Such contributor shall be eligible to receive benefits under the Medical Scheme |
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Grounds for receiving Benefits (Sec. 10(1)) | The contributor shall be entitled to receive benefit under this scheme for treatment in case of employment related accident. For treatment in case of accidents other than employment related, contributor shall receive benefit pursuant to Section 11(2). | Contributor shall be entitled to receive benefit under this scheme for treatment in case of accidents. The amendment removed different provisions for employment related and non-employment related accidents. |
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Limitations of Benefits under the Scheme (Sec. 11) | No Provision | Section 11(1A): In case a contributor undergoes treatment for any employment related accident, the employer, the contributor or his/her family member should notify the SSF within seven days. The notification can be provided either through (a) phone number, (b) email or (c) any other means prescribed by SSF. The notification should include SSF Identification Number as well. |
| No Provision | Section 11(1B): If the contributor does not notify SSF pursuant to Section 11(1A) and carries out treatment in any hospital other than those having MOU with SSF, SSF shall not bear treatment expenses more than Seven Lakh. However, if the contributor notifies SSF and carries out treatment at prescribed hospitals, SSF covers 100% treatment expenses. | ||
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Limitation of Pension Benefit (Sec. 12) | The lifetime monthly pension provided to the employee who is permanently disabled shall not be less than 60% of minimum basic remuneration prescribed by the Government of Nepal and more than 3 times the minimum basic remuneration. | The lifetime monthly pension provided to the employee who is permanently disabled shall not be less than 60% of minimum basic remuneration prescribed by the Government of Nepal. The upper threshold of such monthly pension scheme has been removed through second amendment. |
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Rate of Payment (Sec. 13A) | No Provision | The rate of payment of benefits under Accident Scheme shall be as per the Procedure. In case the claimed rates are less than the rates prescribed under the Procedure, SSF shall verify the bill and pay for the claimed amount. |
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Beginning of the Benefit (Sec 14A) | No Provision | The coverage for the treatment under Dependent Family Protection Scheme begins from the date when SSF starts receiving contribution from the contributor. The benefits under this Scheme will not be available once the contribution is stopped in SSF. |
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Scholarships for contributor’s children (Section 16(1)) | In the event of Death of contributor, children of the contributor will receive scholarship in following rates:
(a) the amount of scholarship coverage shall be 60% of the basic remuneration of the contributor, (b) scholarship coverage shall be provided to children of the contributor who have not attained 18 years and are eligible to receive the benefits and (c) it shall be divided among them in pro-rata basis |
In the event of Death of contributor, children of the contributor will receive scholarship in following rates:
(a) the amount of scholarship coverage shall be 40% of the basic remuneration of the contributor, (b) scholarship coverage shall be provided to maximum two children of the contributor who have not attained 18 years and are eligible to receive the benefits and (c) it shall be divided among them in pro-rata basis |
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Enrollment in the Scheme (Sec. 19) | Section 19(1A): No Provision | A contributor with prior notification to SSF can make additional contribution, beyond the required 18.33% from his/her remuneration to the SSF. |
| Section 19(2A): No Provision | Among 28.33% amount accumulated for the Old Age Protection Scheme, 20% shall be allocated for Pension Scheme. | ||
| Section 19(2B): No Provision | Among the 28.33% amount accumulated for Old Age Protection Scheme, 8.33% shall be allocated for Retirement Scheme. | ||
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Enrollment in Pension Scheme (Sec. 20) | Section 20: Following employees shall be included under Pension Scheme:
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Section 20(1): Any employee who starts contribution on the SSF from 2078/04/01 shall be under pension scheme by default.
Section 20(2): Employees contributing in SSF at the time this Section was introduced or those who start contributing to SSF within the end of month of Asadh 2078 may choose to participate in pension scheme by providing written request to SSF. |
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Benefit under Pension Scheme (Sec. 21(A)) | The formula to calculate the monthly pension is: the total amount accumulated in the fund (including the contribution from employer) and amount of returns received from investment of the fund divided by 180 months (15 years).
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The formula to calculate the monthly pension is: the total amount accumulated in the pension scheme pursuant to Section 19(2A) and amount of returns received from the investment made by the SSF will be divided by 160. |
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Eligibility to receive Pension (Sec 22(2)) | Contributor reaching the age of sixty (60) years before making contribution for 180 months has two options:
(a) receive lump sum amount consisting of principal with the accrued income or (b) receive pension for lifetime calculated by multiplying the sum (contribution + accrued income) by 180.
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Contributor reaching the age of sixty (60) years before making contribution for 180 months has two options:
(a) receive lump sum amount consisting of amount accumulated in the pension scheme pursuant to Section 19(2A) + returns received from the investment made by SSF (b) receive pension for lifetime calculated by multiplying the above stated sum by 160. |
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Amount in Retirement Benefit Scheme and Benefits received (Sec. 23) | Section 23(1): Employees existing before the beginning of Pension Scheme shall be entitled to the lumpsum amount including the contribution+ returns from investment made by SSF at the time of Retirement unless they have made a written request for Pension.
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Following amount shall be allocated for the retirement benefit scheme:
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| Section 23(2): Other provisions relating to this shall be as prescribed by SSF. | The contributor at the time of retirement or in case of termination of his/her employment and in the case of death of the contributor, his/her heir shall receive lumpsum payment of the amount computed after adding the amount deposited in the fund as per this Section and the return received in that amount. | ||
| Section 23(3) : No Provision | A special loan up to 80% of the amount deposited in the retirement benefit scheme pursuant to this Section, may be provided to the contributor after contributing for three consecutive years subject to the provisions of Investment Procedure of the Fund, 2077. | ||
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Amount can be deposited in Retirement Benefit Scheme (Sec 23A) | No Provision | In case the monthly deposit of a contributor in the retirement scheme under the old age protection scheme pursuant to the Sub-section (2A) of Section 19 is more than three times the minimum basic remuneration prescribed by the Government of Nepal and the contributor may deposit such additional amount in the retirement benefit scheme pursuant to the Section 23 by submitting an application to the fund. |
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Returns provided to the Contributor (Sec. 24) | Section 24(1): Instead of utilizing the whole 28.33% deposited by the contributor for Pension Scheme, the Fund may decide to operate Pension Scheme with less than 28.33%. | If the interest rate has been determined by the SSF while operating the schemes pursuant to this Chapter, return shall be provided in the same rate. |
| Section 24(2): In case SSF decides to operate Pension Scheme with less than 28.33%, the Fund may utilize the remaining amount in any other Scheme or allow to withdraw it after completion of retirement age. | In addition to the consideration as per Sub-section (1), there shall be no impediment to provide additional consideration to the contributor on the basis of the profit earned by the Fund. | ||
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Foreign employees allowed to withdraw the amount under Old Age Protection Scheme (Sec. 24A (4)) | No Provision. | In the event of death of any foreign national contributing to the Fund, and his/her heir is entitled to the benefits under Dependent Family Protection Scheme, such heir can receive up to NRs. 700,000/- in case they want to receive a lumpsum amount in place of the benefits. |
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Voluntary participation after 60 years (Sec. 24E(2)) | No Provision. | In case of a person of above 60 years and under an employment relationship, who has voluntarily participated in Social Security Schemes, 20% of the contribution to be deposited in the pension scheme under the old age protection scheme shall also be deposited in the retirement benefit scheme. |
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Determining Basic Remuneration (Sec 35) | Section 35(1): When the Fund pays benefit to a contributor, it will have to consider the average of the monthly basic remuneration of 3 months of the contributor as the monthly basic remuneration.
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When the Fund pays benefit to a contributor, it will have to consider the average of the monthly basic remuneration of last 3 months of the contributor as the monthly basic remuneration. |
| Section 35(2): While determining daily basic remuneration, the amount received after dividing monthly basic remuneration by 26, shall be considered as daily basic remuneration. | While determining daily basic remuneration, the amount received after dividing monthly basic remuneration by 30, shall be considered as daily basic remuneration. | ||
| Section 35(3): No Provision | In case of a contributor who contributes to the retirement benefit scheme by submitting an application as per Section 23A, an amount equivalent to five times of the amount deposited in the pension scheme on a monthly basis will be considered as his/her basic remuneration for the purpose of the benefits to be provided by the fund. | ||
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Benefits not paid from more than one Scheme (Sec. 37A) | No Provision | Monthly Pension or other benefits shall not be provided in such a way that double benefits are received from Social Security Schemes operated under this Directives. |
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