Economy

Govt to unveil social security package

Published by Octron on November 17, 2010

The government is soon introducing layoff benefits and special social security packages to the income earners who made social security tax contributions introduced in the last fiscal year. The government had imposed one percent social security tax to all income earners through budgetary announcement, promising different social security schemes for them.

“Going by the commitment, we are announcing four major schemes — lay off benefits, health insurance, accident cover and maternity benefits,” said a senior Finance Ministry official.

The benefits will be announced exclusively for the social security tax payers. And to start with, the incentives will be meager as well, the source told Republica.

Under the benefit, the government will provide basic salary to the wage earners and other taxpayers if they went out of work, securing them financially during the lean job period.

As this benefit will cushion service holders through their unemployment, the government believes implementation of this benefit will facilitate liquidation of companies, preventing undue resistance and demands from the workers.

“As employer, we are hopeful it will pave way for the introduction of ´hire and fire´ provision in the country´s existing rigid labor regime,” said Surendra Bir Malakar, president of Nepal Chamber of Commerce (NCC), who was a member of the team that worked out the schemes.

The health insurance package, meanwhile, will cover medical bills of social security taxpayers when they fall ill, while accident benefits will institutionalize the system of compensating employees in case of industrial accidents and workplace hazards.

“The ceiling of such benefits and extent of coverage will be announced after necessary consultation with technical experts,” the source said.

Likewise, if the social security tax contributor is female, she will enjoy maternity benefits, which will cover cost of delivery and also basic salary during the leave period.

Source: Republica

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