This is a complete turnaround from the government´s earlier pledge of enrolling employees in insurance plans and footing a certain portion of their medical bills in case they fall sick, meet with an accident or get pregnant.[break]
"The government had to abandon its earlier plan due to lack of fund," Mahesh Baral, director of Social Security Fund (SSF), told Republica.
The SSF last year raised Rs 742.46 million by slapping a one-percent tax on the basic salary of workers employed in the formal sector. On top of this, it also received Rs 100 million from the government last year.
But a study shows this amount is not sufficient to finance health and workplace accident insurance and maternity benefits as envisaged by the government.
However, if employers start making contribution of 1.67 percent of employees salary to the fund after enforcement of the Social Security Organization Act, the SSF will have sufficient resources to launch these schemes, the report says.
"The government is thus planning to drop the idea of covering the cost of medical treatment of employees for now, and start providing them certain portion of salary amount for the days they could not attend the workplace," Baral of the SSF said.
As per the plan, the government may provide 50 percent to 70 percent of the salary amount in compensation in case employees fail to attend the workplace because of illness, accident or pregnancy.
"This provision will be easier for us to implement as possibilities of receiving fraud cases under this scheme are very less," Baral said.
His statement stems from fears that the SSF may not be able to properly investigate fraud claims and other malpractices, in case of launch of insurance plan, due to shortage of human resources.
The SSF is currently facing a severe deficit of staff as the government has appointed only a handful of officials citing it is yet to kick start its real business. Worse, it does not even have a chief for the last four months which is preventing the fund from taking crucial actions like formulating Social Security Organization Act.
"If the executive director is not appointed soon the government´s goal of launching social security program within this year will not materialize," Baral said.
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