Social Security Fund (SSF) Nepal: The Four Schemes and Benefits Explained

The Social Security Fund (SSF) is Nepal's national, contribution-based social-security institution, operated under the Ministry of Labour, Employment and Social Security. It was given a comprehensive legal basis by the Contribution Based Social Security Act, 2074 (2017), and its day-to-day operation is governed by the Social Security Schemes Operation Directive, 2075 (2018). The contributory scheme was formally launched on 27 November 2018, shifting Nepal's formal-sector social protection from scattered employer-paid gratuity and provident fund arrangements toward a single, portable, fund-managed system.

Unlike the tax-financed Old Age Allowance and other social-assistance grants that Nepal pays to the elderly and vulnerable, the SSF is a contributory scheme: benefits are funded by, and largely proportional to, contributions made on the worker's basic remuneration. Membership is mandatory for formal-sector enterprises and their employees, and the scheme is being progressively extended to the self-employed and informal workers. Because entitlements attach to the individual member rather than to a single employer, accumulated contributions and benefit rights move with the worker between jobs.

Every month a total of 31% of the worker's basic remuneration is deposited into the Fund: 11% deducted from the employee and 20% paid by the employer. On the employee side, 10% represents the provident-fund component and 1% is social security tax; on the employer side, 10% is provident fund, 8.33% is gratuity, and 1.67% is an additional contribution. Employers are responsible for collecting and depositing the combined amount, typically by the 15th of the following month.

The pooled 31% is then allocated across the four protection schemes. The bulk funds long-term retirement saving, while small slices finance the insurance-style protections that pay out only when a covered event (illness, accident, disability or death) occurs. The standard allocation of basic remuneration is set out below.

This scheme covers the everyday health needs of contributors and, for maternity, of a contributor's spouse. General medical eligibility begins after three consecutive months of contributions, while maternity cash benefits require at least 12 months of contributions within an 18-month period. Treatment is generally accessed through SSF-listed hospitals and health facilities.

Treatment cover is capped on an annual basis, split between inpatient (hospitalised) and outpatient care. The scheme also provides a cash sickness benefit when a contributor needs extended medical leave, and a maternity cash grant linked to the minimum wage. These are durable design features set by the operating directive; the exact rupee ceilings are periodically reviewed, so members should confirm current limits on the SSF portal.

This scheme protects members against the consequences of accidents and occupational diseases, distinguishing between employment-related and non-employment-related events. For accidents and occupational diseases that arise out of work, the scheme covers treatment costs in full at prescribed facilities; for accidents unrelated to employment, treatment is covered up to NPR 700,000. Notification of a covered accident should be made to the SSF promptly, generally within seven days.

Where an accident or occupational disease leaves a worker temporarily unable to work, the scheme pays a cash benefit equal to 60% of basic remuneration until the worker recovers and returns to work. If the injury results in permanent disability, the member receives a lifetime monthly pension; for 100% disability this equals 60% of the last drawn basic remuneration, with partial disability paid proportionately to the assessed degree of impairment.

If a contributing member dies, the Dependent Family Protection scheme provides ongoing support to the survivors, structured around a survivor pension, a children's education allowance and a funeral grant. The surviving spouse receives a lifetime monthly pension equal to 60% of the deceased member's last drawn basic remuneration; this entitlement generally ceases on remarriage. Where there is no surviving spouse or eligible children, dependent parents living with the member may instead receive the lifetime pension.

Dependent children under the age of 18 receive an education (scholarship) allowance of 40% of the last basic remuneration, payable for up to two children and divided proportionately among them. In addition, a one-time funeral grant of NPR 25,000 is paid to help meet the costs of last rites. Together these benefits cushion a family against the sudden loss of a breadwinner.

The Old-Age scheme is the largest part of the SSF, financed by the 28.33% retirement allocation that combines provident fund, gratuity and pension contributions. Whether a member retires with a lifetime pension or a one-off payment depends on two thresholds: length of contribution and age. A member who has contributed for at least 180 months (15 years) and has reached age 60 qualifies for a lifetime monthly pension.

For qualifying members, the monthly pension is derived from the member's accumulated contributions plus the Fund's investment returns, converted to an annuity (commonly described as dividing the accumulated pension balance by 160 to set the monthly amount). A member who reaches age 60 without completing 180 months of contributions instead receives the accumulated balance, including investment returns, as a lump sum. If a member dies before retirement, the accumulated amount with returns is paid to the heirs.