Social Security Scheme: Call for redefining scheme as the financial burden increases

Hemanta Joshi and Sita Bhattarai / Kathmandu: The number of beneficiaries receiving the social security allowance in the past five years has reached around one million while the government’s responsibility under the social security has increased four folds.

Presenting the budget for the current fiscal year, 2023/24, Finance Minister Dr Prakash Sharan Mahat said the government has allocated Rs 12.8 billion for salaries, administrative expenses, social security, principle and interest payments of public debt. All expenditures under these headings are the government’s mandatory obligations. For the current FY, the government has set aside over Rs 157 billion (nine percent) of more than Rs 1,751 billion budget under the social security allowance.

Introduced by the government as a non-contributory programme with the aim of reducing economic risks of citizens and helping in the consumption, the number of beneficiaries receiving the security is increasing, and so is the economic burden of the government.

In view of this, economic experts have suggested that there is a need to seriously think about the government’s increasing responsibility and redefining the social security programme. Former Vice Chairperson of the National Planning Commission Dr Pushpa Raj Kandel has stressed the need for balancing the economic burden of the state caused by the social security programme and managing it accordingly.

As average life expectancy of Nepal is increasing, the age limit for receiving the old-age allowance should increase, and double benefits be removed, he suggested.

“There is a need to take stern action against those beneficiaries receiving double benefits by producing fake documents, which will help save the state property from being misused,” he said, adding that the government cannot stay away from the social security in a welfare state. The state should not deprive actual beneficiaries and at the same time save state properties from being misused, he said.

The state can identify target beneficiaries and manage the distribution system of the old-age allowance, suggested economist Dr Chandra Mani Adhikari, adding that the state is lagging behind in identifying target beneficiaries.

“The social security allowance should be provided only to the needy to sustain their lives. It is not a good idea to increase financial burden on the state by providing the allowance to the economically well off. There is a need for the government to manage the social security allowance, which is a mandatory obligation of the state, in a new way,” he said. It requires redefining the social security allowance scheme by amending the standard as per time, and making procedures accordingly, he said.

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 has reached 3,800,277 as of the FY, 2022/23 from 2,827,518 in the FY, 2018/19. In the past five year, additional 972,759 beneficiaries have increased. Analysing the data, the number of beneficiaries has increased every year.

According to the Preamble of the Social Security Act, 2075 BS (2018), it is expedient to make necessary provisions on the protection of the right to social security of the indigent citizens, incapacitated and helpless citizens, helpless single women, citizens with disabilities, children, citizens who are unable to take care themselves and citizens belonging to the tribes on the verge of extinction in accordance with the Constitution. To achieve the goal of a welfare state, the government has a policy of ensuring social security at all stages of the human life cycle from pregnancy to death with the slogan of ‘social security from the womb to grief’.

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

According to the Social Security Act, 2075, the persons who are appointed, elected and nominated for any government or public offices, and those who are receiving pension from a government fund and are regularly receiving remuneration, pension, retirement facility and other incentives in any other manner are not entitled to the social security allowance.

Meanwhile, there are complaints about problems in identifying actual beneficiaries, those drawing double benefits and some of them missing out on receiving the allowance. However, Dil Kumar Tamang, director of the social security section of the DoNIDCR, claimed that the trend of drawing double benefits had not currently been in place, and transparency has increased due to digital payments of the social security allowance.

“The Department is regularly monitoring some errors in the distribution of the allowance to the ineligible people and those who are already dead. We have adopted the digital payment method to stop irregularities in the distribution of the social security allowance. To make it more effective, we are coming up with the electronic fund transfer (EFT),” he said. Efforts are on for all local levels to make EFT payments within this FY, he said. “We implemented EFT payments in 50 local levels in the previous FY. This will be expanded to 190 in the first four months of the current FY, and to all local levels within this FY.” With the implementation of the EFT, the allowance will be directly transferred to the bank account of the beneficiaries, he said.

In view of increasing number of beneficiaries every year and increasing economic burden, the Department is carrying out a study to make the allowance distribution more systemic, he said.

Economic obligations increase four folds in five years

With increasing number of beneficiaries, the government’s economic obligations are on constant rise. In the FY, 2018/19, the government allocated Rs 40.99 billion for the social security allowance, out of which Rs 40.21 was spent. Until the current FY, the budget for the heading has increased four folds- Rs 157.7 billion.

Who are entitled to social security allowance

People who are indigent citizens, incapacitated and helpless citizens, helpless single women, citizens with disabilities, children, citizens who are unable to take care themselves and citizens belonging to the tribes on the verge of extinction are entitled to the social security allowance.

According to the Act, the Dalit and single women senior citizens, after completing the age of 60 years, and other senior citizens after completing the age of 70 years, shall get the senior citizen allowance as prescribed by the government of Nepal. Eligible senior citizens have been getting a monthly allowance of Rs 4,000 each.

Until 16 July, 2022, the total 1,627,921 beneficiaries above 68 years of age received the social security allowance, according to available data. Dalit and single women senior citizens above 60 years of age get a monthly allowance of Rs 2,000 each. Their number was 169,423 until 16 July, 2022.

The number of women aged above 60 who have not had second marriage after getting divorced, and who are living upon legal separation and staying unmarried was 212,670. They have been drawing a monthly allowance of Rs 2,660 each. The number of widows was 361,161, who are getting a monthly allowance of Rs 2,660 each.

Persons with profound disabilities categorised into Group ‘A’ who hold a red disability identity card are entitled to a monthly allowance of Rs 3,990 each. Until 16 July, 2022, their number was 66,281.

Persons with severe disabilities categorised into Group ‘B’ holding a blue disability identity card draw a monthly allowance of Rs 2,128 each. Their number was 138,716. The number of the tribes on the verge of extinction including Kusunda, Bankariya, Raute, Surel, Hayu, Raji, Kisan, Lepcha, Meche and Kusabadiya, Patharkatta, Silkat, Kushabadhiya and Kuchabadhiya was 22,208. They are drawing a monthly allowance of Rs 3,990 each.

Up to two children born to a Dalit mother not completing five years of age are entitled to a monthly allowance of Rs 532 each. The number of such children beneficiaries was 1,201,897. RSS