Nepal

Publications

Challenges and Opportunities Around Contribution-based Social Security in Nepal [2021]

Child labour and social protection in Nepal [2022]

Extending contribution-based social security schemes for workers in the informal economy and self-employed in Nepal [2023]

Moving towards a Social Protection Floor in Nepal. An ILO actuarial study for a new pension scheme for all private sector workers and the self-employed [2016]

Moving towards a Social Protection Floor in Nepal. An ILO design and cost assessment for five new social insurance schemes for sickness, maternity, employment injury, unemployment, and medical care [2016]

Social protection responses to COVID-19 in Nepal [2021]

Social Security Fund of Nepal: A Capacity Needs Assessment and Learning Plan [2021]

Strenghtening Social Protection Management Information Systems (MIS): Findings from a Systems Review of the Social Security Fund, Nepal [2022]

Universal social protection. Country cases [2018]

See all

Situation and Priorities

Social protection situation

The 2015 Constitution recognizes social security as a fundamental right, in particular to vulnerable groups and workers, guaranteed free basic health service to all citizens. Similarly, the right to social security in enshrined for vulnerable segments of the society such as Dalits, senior citizens, socio-economically marginalized, persons with disabilities and children. The 16th National Development Plan (2022/23 to 2026/27) intends to continue the extension of social protection in Nepal, through a life-cycle approach, and within a sustainable financing framework. The 16th Plan places emphasis on expanding contribution-based social security to all workers, including those in the informal sector, as one of the key strategies to ensure the constitutional right to social protection to the population. The 16th Plan targets to increase social security coverage from 32 to 60 percent of the population and to decrease the proportion of informal employment in the informal sector from 62 to 40 percent in its five-year period.

To operationalize the right to social protection, a number of rights-based schemes were enacted, such as the Civil Service Act (Third Amendment, 2014), the Labour Act, 2017, the Health Insurance Act, 2017, the Contribution-based Social Security Act, 2017, the Social Security Act 2018, and the Right to Employment Act, 2018. These provide the legal framework for several programmes, ranging from pensions for the public sector, public works programmes, cash allowances to vulnerable groups and social insurance schemes for the private sector. The Government of Nepal introduced in 2023 two by-laws that extend social security coverage to Nepali migrant workers, informal sector workers and self-employed – expanding the coverage of contributory social security beyond the formal sector and the employer-employee relations.

Furthermore, the National Planning Commission formulated an Integrated National Social Protection Framework, with the goal to make the national social protection system more integrated, inclusive, flexible, and effective and to ensure access to all citizens. The Framework is the first coordination instrument for the sector, its implementation will support the streamlining of existing schemes, and to close any coverage and adequacy gaps in the system.

A recent ILO Report on Extending social protection to all in Nepal: An analysis of protection gaps showed that 32.9 percent of Nepalis had access to at least one social protection benefits, and only 16.9 percent had access to income support. Access to social security for people of working age is the least prevalent form of social protection in Nepal. Only 9.9 per cent (or 1.8 million) of the total population between 15-59 years have access to either income support, in-kind benefits, or active labour market programmes, leaving approximately 16.9 million people unprotected.

Both non-contributory income support and contributory measures have low levels of coverage for those in the working age, reaching 5.3 per cent and 4.3 per cent of the population, respectively. Low coverage of contributory measures can be attributed to the fact that the mandatory social security schemes under the Social Security Fund (SSF) have been recently implemented and coverage is limited to workers in the formal sector only. Non-contributory measures in implementation are targeted to specific categories or groups. Despite existing gaps, Nepal is making robust strides to guarantee the constitutional right to social protection for all in the country.

COVID-19 and other crises

The Government of Nepal has introduced a number of measures to mitigate the immediate and medium-term impact of the crisis:

Health spending was increased to ensure an adequate response to the health crisis to include free health care to those that have tested positive for COVID-10. Additionally, an insurance package of NPR 2.5 MM was provided to healthcare and security personnel involved in treating COVID-19 patients.
Moreover, in response to the spike in unemployment due to the COVID-19 crisis and given the absence of a statutory unemployment benefit, the government relied on the Prime Minister’s Employment Programme (PMEP), a public works programme to offer some relief to those affected.
Other immediate measures included tax deferrals, relaxation on repayment of loans for businesses, support for enterprises in the most affected sectors, as well as subsidized funding sustaining small and mid-size enterprises affected by the pandemic.

Visit the Social Protection COVID-19 Monitor

Government and social partner priorities

Extend coverage to 60 per cent of the population with basic social protection schemes by Fiscal Year (FY) 2023-24.
Extend contribution-based social security to workers in the informal sector, self-employment, and workers in foreign employment
Decentralize the operations of the Social Security Fund, and improve its management and information systems.
Build a culture of social protection among workers and employers.

ILO Projects and Programmes

Enabling Sectoral Pathways towards Formality for Vulnerable Workers, and Enterprises in Nepal's Informal Economy
01.03.2023 - 31.07.2025 USD 399,980
Empowered Women Prosperous Nepal (UNJP)
01.01.2023 - 31.10.2026 USD 2,786,063 European Union

See all

Results

The ILO has played a key role in the reform process around the Nepalese labour law and social protection over the past few years (2016-2025), helping to bring all stakeholders around the table. This process eventually led to the adoption of the Social Security Act, which was passed by parliament in 2017. The Act has many sub-legislations, drafted with ILO technical support, and established the National Social Security Fund. The ILO assisted the actuarial valuation and design of individual schemes for the Fund, as well as the design of the national employment programme. See below for more information.

To strengthen the delivery of social security, the SSF formalized a revised Communications and Outreach Strategy in 2022. The strategy proposes communication and outreach methods to improve communication and visibility of the various schemes.
In 2023, the Ministry of Labour, Employment and Social Security and the Social Security Fund extended the coverage of the Social Security Fund to worker in the informal sector, self-employed and Nepali migrant workers. The ILO supported extensively the design and planning of these schemes, and continues to provide technical assistance to their implementation. The Fund is currently providing four different social security schemes to contributing members namely; medical, health and maternity protection; accident and disability protection; dependent family protection; and old age protection. As of March 2025, more than 20,000 employers and above 2 million contributing employees are registered in the fund.
To extend coverage of social security to the workers in informal economy, ILO and the Social Security Fund jointly engaged in building the capacity of local governments and provincial governments. These capacity building efforts are continued in, 2025 and are accompanied by technical support to develop operational guidelines for the engagement local governments with the Social Security Fund.
To upgrade the overall data and information management system of SSF and to make the online platform efficient to interact with growing number of beneficiaries (employers and workers contributing in the fund), ILO is supporting SSF in upgrading the data management system.