Only 1,469 enrolled in SSF out of 4.4 million informal workers

KATHMANDU — Despite a policy decision taken more than two years ago to bring informal and self-employed workers under Nepal’s contribution-based Social Security Fund (SSF), just 1,469 workers have been enrolled so far out of an estimated 4.41 million informal sector workers, exposing serious coordination failures among federal, provincial, and local governments.

The stark gap was highlighted this week as Minister for Labour, Employment and Social Security Rajendra Singh Bhandari publicly acknowledged delays in implementing the scheme. The issue surfaced during the inauguration of a campaign aimed at enrolling informal and self-employed workers, when the minister’s own driver, Indraman Gurung — a contract worker in government service for over a decade — asked why workers like him were still excluded from social security coverage.

Minister Bhandari admitted that the file to include informal, self-employed, and contract government workers in the SSF has been stalled at the Ministry of Finance. The government had taken a formal policy decision on August 18, 2023 (32 Shrawan 2080 BS) to expand the contribution-based social security program to these categories, and the Social Security Fund subsequently issued operational guidelines. However, implementation has remained largely symbolic.

According to SSF data, of the 1,469 enrolled workers, 809 are from the informal sector and 660 are self-employed, all of whom are making regular contributions. This figure represents a negligible fraction of Nepal’s labour force.

Informal Sector Dominates Labour Market

Labour Force Survey data show that Nepal’s internal labour market comprises 7.086 million workers, of whom 4.411 million (62.2 percent) are engaged in the informal sector. Agriculture alone employs 1.434 million workers, while 2.904 million are in non-agricultural informal jobs and 73,000 in domestic labour.

Sector-wise employment distribution indicates that agriculture remains the largest employer, followed by services and sales (23.8 percent), trade (17.5 percent), and construction (13.8 percent). Yet, despite this dominance, informal workers remain largely excluded from institutional social protection.

Contribution Confusion Stalling Enrollment

The primary bottleneck, according to SSF Executive Director Kaviraj Adhikari, is confusion over who pays the government’s share of contributions. Under the current guidelines, informal and self-employed workers must contribute 20.37 percent of the government-declared minimum basic salary to the SSF. With the minimum salary fixed at Rs 19,550, workers contribute 11 percent, while the remaining 9.37 percent is to be paid by the government.

“The law clearly mentions a contribution subsidy,” Adhikari said. “But there is no clarity on how much the federal, provincial, and local governments should each contribute. This uncertainty has stalled expansion.”

While some local governments have voluntarily assumed the full contribution responsibility, such efforts remain limited and poorly scaled.

Only 114 Local Governments Linked to SSF

Under the guidelines, local governments are responsible for registering informal and self-employed workers. However, only 114 local units nationwide have signed agreements with the SSF, and among them, just six municipalities and rural municipalities have actually enrolled workers.

Bhimphedi Rural Municipality in Makwanpur became the first local unit to enroll informal workers. Chairperson Hidem Lama said the municipality has already enrolled 200 informal workers and plans to add another 100 this fiscal year.

“Workers who used to break stones now have access to pensions and free healthcare,” Lama said. “It is tragic that such a transformative program is being sidelined due to confusion over contribution sharing.”

Local Governments Lead, Urban Areas Lag

Local leaders argue that municipalities, not federal or provincial governments, are showing greater commitment. Fedikhola Rural Municipality Chairperson Ghanshyam Subedi in Syangja said his local unit has identified and registered daily wage workers despite having one of the weakest revenue bases in the district.

“Even when the federal government initially allocated just Rs 50 million, we moved ahead,” Subedi said, adding that the current allocation is sufficient if implemented effectively.

In contrast, urban municipalities remain divided, often entangling social protection with voter eligibility. One of the mayor of Kathmandu valley said many municipalities are reluctant to register workers who are not listed as local voters, despite them working and contributing to the local economy.

“Workers contribute where they work, not where they vote,” Lama said. “Excluding them on electoral grounds is unjustifiable.”

Benefits Exist, Access Does Not

Workers enrolled in the SSF are entitled to a wide range of benefits, including medical treatment up to Rs 100,000, maternity benefits equivalent to 60 percent of minimum salary for 98 days, child-care allowances, accident treatment up to Rs 700,000, disability compensation, dependent family pensions, education allowances for children under 18, funeral grants, and lifetime monthly pensions after the age of 60.

Yet, for the vast majority of Nepal’s informal workforce, these benefits remain out of reach — not due to lack of policy, but due to weak execution, fiscal indecision, and fragmented governance.