Foreign Employment Welfare Fund & Mandatory Insurance in Nepal: Benefits, Compensation & How to Claim

The Foreign Employment Welfare Fund (Baidesik Rojgar Kalyankari Kosh) is a statutory social-protection fund created to cushion Nepali migrant workers and their families against the worst risks of working abroad: death, serious injury, critical illness, abandonment in distress, and the cost of bringing a body home. It is anchored in the Foreign Employment Act, 2064 (2007) and the Foreign Employment Rules, 2064 (2008), which together govern Nepal's labour-migration system.

The fund is administered by the Foreign Employment Board (FEB) — historically known as the Foreign Employment Promotion Board (FEPB) — which works alongside the Department of Foreign Employment (DoFE) under the Ministry of Labour, Employment and Social Security. The DoFE issues labour approvals and recruiter licences, while the Board manages welfare services, relief payments, rescue and reintegration programmes. The Board operates a toll-free helpline (1141) for beneficiaries to check the status of death, disability and family-treatment claims.

The fund is built largely from a compulsory deposit paid by each worker at the time of receiving labour approval, supplemented by other sources permitted under the law and rules. The contribution is tiered by the length of the labour approval: a worker leaving on a contract of up to three years pays a lower amount, while those on longer contracts (for example five-year contracts common for Korea, Israel, Europe and the United States) pay more.

Reported contribution levels have been Rs 1,500 for approvals up to three years and Rs 2,500 for longer approvals. As with all administratively set figures, the exact contribution and any relief amounts are periodically revised by the government, so departing workers should confirm the current rate with the DoFE or Board before paying.

The fund's best-known benefit is a lump-sum cash relief paid to the family of a worker who dies abroad, and to workers who suffer serious physical injury or develop a critical illness during foreign employment. This relief is paid from the welfare fund and is separate from any insurance payout (described below); a family may be entitled to both.

The government raised this welfare relief to Rs 700,000 per worker, up from Rs 300,000 earlier. The relief generally applies to documented migrants — those who left through proper, government-approved channels with a valid labour permit — and is tied to death or qualifying harm occurring during the employment period (and, in practice, within a limited window after return or end of contract). The Board has also extended support toward the treatment of a defined list of critical illnesses.

In addition to the welfare fund, Nepali law requires every outbound migrant worker to hold an insurance policy before a labour permit is issued. This is a foreign-employment term-life policy, typically with a critical-illness component, sold by licensed Nepali life insurers and matched to the length of the labour contract. The policy pays the worker's family if the worker dies, and provides cover for permanent disability and critical illness.

The insurance has historically combined a life/death sum assured with a critical-illness sum assured; figures cited in the past include around Rs 1.5 million for death and Rs 500,000 for critical illness, with a combined guaranteed payout of roughly Rs 2.7 million reported under later requirements. Premiums are modest and rise with the worker's age and the term, with an additional premium of about Rs 400 for the critical-illness cover. Because the precise sums, premiums and even the mandate itself have been subject to government review, workers should verify the current requirement and coverage with their insurer, the DoFE or the Board.

The welfare fund pays for the free repatriation of the bodies of workers who die abroad, including the management of unattended or unclaimed deceased workers, and funds rescue operations for workers stranded or in distress in destination countries. It also provides health-treatment assistance to workers' families and supports skills-oriented training and reintegration programmes for returnees.

To protect the next generation, the Board runs a descendant scholarship scheme for the children of workers who died, were disabled or fell seriously ill abroad and whose families had received welfare-fund support. The scholarships assist children studying in community or institutional schools in Nepal, from pre-primary up to grade 12, helping bereaved families keep their children in education.

Nepal has decentralised the claim process so families no longer have to travel to Kathmandu to begin a claim. An immediate family member or nearest heir starts the application at their own local level (ward/municipality or rural municipality), which verifies identity and documents and helps issue the required certification. The file is then routed through the labour office / DoFE and forwarded to the Foreign Employment Board in Kathmandu for final verification, after which the relief is deposited directly into the bank account of the deceased worker's nearest relative.

Insurance claims run in parallel: the family submits the claim to the insurer (and presents supporting evidence such as the death/police report and the employment contract) to obtain the insured sum. Families should keep both the welfare-fund and insurance processes moving, as they are distinct entitlements. Typical supporting documents include those listed below; the Board has also been developing an integrated online system to let families apply and track claims remotely.