A Synopsis Report after Second Amendment on Workflow of Social Security Scheme 2075 on 2077/10/29 (11 Feb, 2021)

1. Contribution based
Social Security
Schemes of Nepal
A Sy n opsis Rep ort after S econ d
A men d ment on Workflow of
S oc ial S ec u rity S c h eme 2 0 7 5 on
2077/ 10/29 ( 11 Feb, 2021)

2. Disclaimer:
The information provided in this presentation is a summarization for informational purposes.
It does not take any responsibility of accuracy and completeness of information and any damages
suffered from any action or decision taken as result of using of this presentation.
The information in this document do not reflect legal advice of any kind. It is not intended as a
substitute for professional advice.
The presentation does not cover all the benefits, criteria, and regulations of Social security schemes.
It is highly recommended to follow authorized source of information from www.ssf.gov.np
Nitesh Joshi, AT(ICAN)

3. Participation Criteria:
Provision Sector
Mandatory Employees of the listed (registered) employers, to deposit within 15 days of
end of Payroll month (Nepali or English Payroll Structure)
Voluntary Self-employed employees and employees working in informal sector
For government employees As per Rule 3 of Contribution based Social Security Rules 2075,
Government employees shall be entitled to participate in Social Security
Plan as per Nepal Gazette published by Nepal Government.
Period of Contribution Contribute from the date of listing of employee, or first month of join date
to the last day of employment and even during continuous 3 months of
absenteeism
Period:
Nitesh Joshi, AT(ICAN)

4. S.
N.
Heading Employee’s
Contribution
Employer’s
Contribution
Total Rate SSF Schemes Distribution
1 Provident Fund 10% 10%
31% of
Basic
Salary
Medical & Maternity Coverage 1%
2 Social Security Tax 1% - Accidental & Disability Coverage 1.4%
3 Gratuity - 8.33% Dependent Family Protection 0.27%
4 Medical & Accidental
Insurance
- 1.67% Old Age Scheme
A. Pension 20%
B. Retirement 8.33%
28.33%
Total 11% 20% Total 31%
Nitesh Joshi, AT(ICAN)

5. Medical & Maternity
Coverage 1%
Hospitalization:
Limit
100k
Listed Hospitals
(at present all medical
institutions are accepted
due to limited MoU)
Upto 100k only
Listed rates (NIB rates)
20% deductible, rest
non-cash modality
Dependents not covered
Critical Illness not
covered
Domiciliary
(Limit
25k
within
100k)
Home treatment upto
25k
Listed rates (NIB rates)
20% deductible
Dependents not covered
Critical Illness not
covered
Maternity
(Limit
100k
within
100k)
Regular Maternity
treatment, Operation,
hospitalization
Coverage upto 6 weeks
post delivery
Coverage upto 3 months
for Child treatment
Listed rates (NIB rates)
20% deductible
Maternity
Benefit
Additional
(Based
on
Basic
Salary)
1 month Min. Salary for each
new born, or for abortion case
after 24 weeks/miscarriage
(only 1 applicant allowed if in case
of dual contributor)
Sick Leave pay: 60% of BS
exceeding 12days paid sick
leave upto 13 weeks referred
by Doctor or in hospital
Maternity Leave Pay: 60% of
BS for upto 38 days exceeding
60 days paid leave
60% of BS of paid leave period
if Contributor couldn’t get the
payment from employer due
to closure of business or Job
retirement
Addition:
Can continue the Medical Coverage even after age of 60 by the Contributors who contributes to this scheme from his/her
Pension income as amount prescribed by SSF Nitesh Joshi, AT(ICAN)
Du rin g reg u lar contrib u tion
b efore age 6 0 ( Not ap p licab le after age of 6 0 )
Scheme 1

6. Nitesh Joshi, AT(ICAN)
• The benefit will be provided after regular contribution of 3 months,
and it will remain effective for the 3 months after contribution is stopped.
• The benefits will be re-activated if the contribution gets regularized for
continuous 3 months
• Hospitalization, Domiciliary and Maternity treatment total benefit shall not
exceed 1 Lakh in one fiscal year
• Expenses incurred in performing abortion except in accordance with
the prevailing law will not be covered
• Treatment of Plastic Surgery, Dental check-up and
bariatric surgery are not covered Nitesh Joshi, AT(ICAN)
Major Conditions:
Medical &
Maternity
Coverage 1%

7. Accidental & Disability
Coverage 1.4%
• All expense incurred for treatment of injury on the job or occupational disease
• Upto 700k if treatment conducted on unlisted medical institution or not notified within 1 week to SSF
Employment related Accident & Job related Disease
• Full 60% of BS upto his/her death for Permanent Total Disability (PTD)
• Percentage based (Partial) on 60% of BS upto his/her death for Permanent Partial Disability (PPD)
• 60% of BS upto his/her return to work for Temporary Total Disability (TTD)
• Inflation will be adjusted
• Re-assessment of Disability will be done on every 5 yrs and last on age of 58
Employment related Disability due to Accident or Disease
• Upto 700k for treatment of accidental injury.
• Disability is not covered if accident or disease is not related to job
Accident (not related to job)
Nitesh Joshi, AT(ICAN)
Scheme 2

8. Major Conditions:
• The benefit is applicable from the date of contribution and
ends from the date after contribution is stopped.
• No coverage if contribution is not done. For regular
contributors only. Not applicable after age of 60.
• In case of occupational disease and its treatment, benefit is
applicable only after two years of contribution into the
fund and will remain effective for 2 years after contributor
stops making contribution.
• No worldwide coverage.
Nitesh Joshi, AT(ICAN)
Accidental & Disability
Coverage 1.4%

9. Dependent
Family Protection 0.27%
Pension
to
Spouse
60% of BS
Not eligible if Spouse
has alternative
employment or is on
another marriage
Spouse may apply to
pension in case of end
of his/her employment
where s/he is not
eligible for old age
pension scheme
Education
Benefit
to
Children
40% of BS to a child
upto 18 age (40% on
pro-rata to max 2
children if in case more
than 1 eligible child)
Upto 21 age if child is
pursuing continuous
education, and not get
married or completes
education
No age limit if child is
physically or mentally
disable for employment
Benefits
to
deceased’s
Parent
60% of BS
proportionately for
dependent parents if
deceased has no
spouse or children
No age limit, coverage
upto life for both
parents
Other
Lump
Sum
Benefits
Contribution of 28.33%
+ its returns will be
provided to Nominee
25k to deceased’s
family for Funeral
compensation
Nitesh Joshi, AT(ICAN)
In case of Death of foreign employee, his/her nominee can take Dependent Family coverage facilities or lump sum amount
upto 700k
Du rin g reg u lar contrib u tion
b efore age 6 0 ( Not ap p licab le after age of 6 0 )
Scheme 3

10. Old Age
Scheme
Nitesh Joshi, AT(ICAN)
Topic A. Pension Scheme 20%
Contributors upto Ashadh end, 2078
(July 15, 2021)
Withdrawal Options:
1. Full or partial transfer to Retirement Scheme on job retirement
2. Full or partial transfer to Retirement Scheme on age of 60
3. Full or partial pension scheme selection based on fund balance in this scheme
(Contributor can select any of above option fully or partially)
Special Loan Options:
1. Full or partial transfer to Retirement scheme for 80% loan apply at any period
after 3 years contribution
New Contributors from Shrawan, 2078
(July 16, 2021)
Withdrawal Options:
1. Compulsory to Pension scheme for contributors contributing equal or more than
180 months (15 years)
2. Pension earning starts only at age of 60
3. Full transfer to Retirement plan if contribution is less than 180 months at age of
60, or option to choose Pension from the saved amount
4. Partial transfer to Retirement Scheme for deposit higher than 3 times of GoN basic
Salary
5. No Special Loan option from this Scheme Savings
Nitesh Joshi, AT(ICAN)
Scheme 4

11. Old Age
Scheme
Nitesh Joshi, AT(ICAN)
B. Retirement Scheme 8.33% + Others
Sources:
1. Regular 8.33% contribution
2. Employee Self Contribution like CIT for tax saving
3. Fund transferred from Pension Scheme
4. Fund transferred from old ARF or URF (EPF + CIT + Gratuity) accounts before SSF (Optional; Not applied till date)
5. Voluntary contribution after age of 60 on Old Age Scheme (Both 20% + 8.33%) in Retirement Plan
Withdrawal Options:
1. At the time of Job retirement at any age of life
2. In case of death, to his/her nominee
Loan options:
With collaterals or against deposit:
1. Home Loan: Minimum of 75 Lakh or 15 years Basis Salary or Probable Savings upto age of 60, on collateral
2. Education Loan: Upto 35 Lakh, on collateral
3. Social Loan: only in condition to swap contributions & loan from ARF
4. Special loan: Based on Savings on Retirement Scheme. Upto 80% on ARF swap or after 3 yrs of contribution
Nitesh Joshi, AT(ICAN)
Scheme 4

12. Case Pension Scheme 20% Retirement Scheme 8.33% + Others
Foreign Contributors, or
contributors who can submit foreign
Citizenship certificate with proof of
abandonment of Nepalese Citizenship
Withdrawal Options:
• At the time of Job retirement at any
age of life
Withdrawal Options:
• At the time of Job retirement at any
age of life
No restriction to earn multiple pension
other than SSF
• Pension earner from GoN or
elsewhere can also earn this pension
Rate of Returns • Returns will be based on profit/return
made of SSF from its Investment
announced to its contributors for
Pension Fund
• Inflation rate will be adjusted in every
3 years in Monthly pension earning
amount as per Actuarial Report
• Returns will be based on
profit/return/interest declared by SSF
from its Investment announced to its
contributors for Retirement Fund
Old Age
Scheme
Nitesh Joshi, AT(ICAN)
Scheme 4

13. Current Tax Provision of FY 2078-79 (2021-22):
Tax Benefit on regular Savings:
1. Actual contribution 31% or 5 Lakh or 1/3rd of Assessable income is deductible from Assessable income.
2. No liability of Social Security Tax 1% (already collected in 31%)
Tax on Lump Sum withdrawal:
1. Upto 5 lakh, no Tax
2. 5% Tax on Lump sum amount reducing maximum of 5 lakh or 50% of Savings whichever is higher
i.e. i) Upto 10 lakh- first 5 lakh, no Tax; 5% Tax on remaining lump sum
ii) Above 10 lakh- 2.5% of whole lump sum amount
Taxes on Benefits (Income Tax: slab based Tax of 0,10,20,30,36%) :
1. Medical & Maternity Coverage: Income Tax on insurance compensation; Income Tax on benefits of leave
encashment
2. Accident & Disability Coverage: No Tax on accident insurance compensation and accidental monthly benefits of
PTD, PPD, TTD; Income Tax on disability compensation and benefits of PTD, PPD, TTD
3. Dependent Family Protection: No Tax on funeral compensation; ARF Tax on lump sum amount; Income Tax on
monthly benefits to spouse, children, parents; 25% expansion of First slab due to pension income
4. Old Age Scheme-Pension: Income Tax on monthly benefits to contributor or spouse; 25% expansion of First slab
due to pension income Nitesh Joshi, AT(ICAN)

14. Other major points:
Notification or Communication:
1. All claim process will be online through SSF portal from contributors in format prescribed by SSF.
2. Notifying SSF for accidental cases will be through phone, email or messages to provided number or email of SSF including
contributors SSFID number from any person (contributor/ non-contributor/ employer)
3. Employer shall notify SSF within 1 month for employee retirement, age of 60 or death.
Optional/voluntary Participation:
1. Being in regular job, even after age of 60, contributor can contribute 28.33% in retirement scheme
2. Self-contribution is allowed if in case of non-continuation of employment. Such amount shall be deposited to account as
prescribed by SSF. (Not activated yet)
3. Contributors can opt to include family members for Social security schemes with additional contributions based on number
of family members as prescribed by SSF. (Not activated yet)
Option not to choose any benefits:
1. Though SSF is made compulsory, any benefits and facilities arising from SSF is selective for contributors
Calculation Formula:
• Basic Salary = Average of last 3 months Basic Salary from contribution
• Per day Salary = Basic Salary / 30 days
• Basic Salary for contributor transferring Pension to Retirement for deposit higher than 3 times of GoN basic Salary = 5 times of
monthly contribution in Pension plan
• (Total contribution + Returns from SSF)/160 months = Monthly Pension Amount * Inflation adjustment for lifetime
Nitesh Joshi, AT(ICAN)

15. Thank You
Nitesh Joshi, AT (ICAN)