"Make social security scheme less financially burdensome"

KATHMANDU, AUGUST 10: With the number of beneficiaries receiving social security allowances in the past five years reaching around one million, the government's responsibility under the social security program has increased fourfold.

While presenting the budget for the current fiscal year 2023/24, Finance Minister Dr. Prakash Sharan Mahat stated that the government has allocated Rs. 12.8 billion for salaries, administrative expenses, social security, principal, and interest payments of public debt. All expenditures under these categories are mandatory obligations of the government. For the current fiscal year, the government has allocated over Rs. 157 billion (nine percent) of the total budget of more than Rs. 1,751 billion for social security allowances.

Introduced by the government as a non-contributory program with the aim of reducing economic risks for citizens and aiding consumption, the number of beneficiaries receiving the security is increasing, along with the economic burden on the government.

In light of this, economic experts have suggested the need to seriously consider the government's increasing responsibility and redefine the social security program. Former Vice Chairperson of the National Planning Commission, Dr. Pushpa Raj Kandel, stressed the necessity of balancing the economic burden caused by the social security program and managing it accordingly.

As the average life expectancy in Nepal is increasing, Dr. Kandel suggested increasing the age limit for receiving the old-age allowance and removing double benefits.

"There is a need to take stern action against those beneficiaries receiving double benefits by producing fake documents, which will help save state property from being misused," he said. He added that the government cannot avoid social security in a welfare state, and it should not deprive actual beneficiaries while also preventing misuse of state resources.

Economist Dr. Chandra Mani Adhikari suggested that the state can identify target beneficiaries and manage the distribution system of the old-age allowance. He emphasized that the allowance should be provided only to those in need to sustain their lives. He proposed that the government should manage the social security allowance in a new way, redefining the program and amending standards as needed.

Number of beneficiaries According to the Social Security Section of the Department of National ID and Civil Registration (DoNIDCR), the number of beneficiaries of the social security allowance reached 3,800,277 as of FY 2022/23, up from 2,827,518 in FY 2018/19. Over the past five years, an additional 972,759 beneficiaries have been added.

The Social Security Act of 2075 BS (2018) aims to protect the right to social security for indigent citizens, incapacitated and helpless citizens, single women, citizens with disabilities, children, and citizens belonging to tribes on the verge of extinction. The government aims to ensure social security at all stages of the human life cycle from pregnancy to death.

In the current fiscal year, the government has allocated over Rs. 157 billion for the social security program, including the old-age allowance.

The Social Security Act specifies that individuals appointed, elected, or nominated for government or public offices, and those receiving pension from a government fund or regular remuneration, pension, retirement benefits, and incentives, are not entitled to the social security allowance.

Despite efforts to streamline the distribution process, there have been complaints about problems in identifying actual beneficiaries and preventing double benefits. Dil Kumar Tamang, director of the social security section of the DoNIDCR, mentioned that the trend of drawing double benefits had been reduced due to digital payments of the social security allowance. The department is working to expand electronic fund transfers (EFT) to all local levels to enhance transparency and effectiveness.

With the increasing number of beneficiaries and economic burden, the Department is conducting a study to make the allowance distribution more systematic.