Contribution-Based Social Security in Nepal: Opportunity and Challenges

Abstract

This paper examines Nepal’s contribution-based social security system by analysing its policy framework, operational procedures, and the programmes implemented by the Social Security Fund (SSF). Drawing on secondary data and literature, the paper outlines the concept of contribution-based social security, its core principles—social solidarity, income security, equity and inclusion, and income redistribution—and its historical development and global practices. The paper highlights Nepal’s legal and policy context, including the constitutional recognition of social security as a fundamental right and the role of the Contributory Social Security Act, 2074. It summarises the SSF’s schemes for formal sector workers, foreign-employed individuals, and informal or self employed workers, covering benefits such as medical care, health and maternity protection, accident and disability support, dependent family security, and old-age plans. The paper also identifies key opportunities, including poverty reduction, enhanced socio economic protection, improved inclusion, and strengthened financial sustainability. At the same time, it outlines major challenges, such as the growing pressure on treasury-funded programmes, fragmentation and poor coordination among schemes, and difficulties in extending coverage to informal and foreign-employed workers.