Diffusing Contribution-Based Social Security Fund (CBSSF) in Nepal: Understanding the Causes of Low Take-Up

Abstract

Introduction The government of Nepal introduced the Social Security Act in 2018 which incorporated comprehensive social security schemes such as old age pensions, gratuity, dependent family protection, medical benefits, and accidental and disability benefits. The program's main objective was to widen the coverage of social protection to the working-age population of formal private sectors. However, the diffusion of the program has been regarded as slow in the first three years. This dissertation attempts to understand the potential causes of low take-up of the contribution-based social security system of Nepal from the perspective of private school employers and teachers. Method Eighteen respondents were selected based on the purposive sampling method and a semi-structured interview was used as an instrument of data collection. Additionally, government document analysis was also deployed for triangulation. A brief review of countries that had contributory pension and social insurance programs was also included. Findings A perceived high rate of contribution, lack of awareness about the program, lack of flexibility of time in contribution payment, problems of continuity of contribution, poor law enforcement, lack of accountability of hospital, the lack of sufficient hospitals with which CBSSF has reimbursement agreement, centralized administrative service of CBSSF, narrow coverage were found as some of the major obstacles to the effective diffusion of the program. Conclusion CBSSF offers a comprehensive social protection scheme for employees of formal sectors and the take-up is rising slowly. However, the system may need to introduce flexibility in rate and time for paying contributions at least for special sectors like private schools. Further, the access of quality hospitals from where beneficiaries take up the medical benefits and services has to be increased both quantitatively and qualitatively for quicker diffusion of CBSSF.