Role of Social Security Organization (SSF, EPF & CIT) during Covid-19 (Corona Virus)


Having originated as a public health crisis, the Covid-19 pandemic has also developed into a global economic crisis, with severe and potentially lasting impacts on economic activity, employment and trade.

With daily information coming in our unprecedented jumps in unemployment claims and more severe than expected production losses, and the expected costs of the pandemic on the economy and labor markets are likely to be both more prolonged and more hard-hitting than was estimated by Ministry of Finance, Nepal.


Importance of Social Security Organization


The Social Security Organization aim at providing safety to a man from various contingencies or unseen risks and which are found in all the ages and in all the countries. The concept of social security is as old as the history of mankind itself and in every society are found men craving for social security. In an early period society or religious institutions or rulers made attempt with their little resources tackled the problems relating to Social Security Matters. Now the Country has established different types of Social Security Organizations. In Nepal, we have three social security Organizations which are as follows;

  1. Employee Provident Fund
  2.  Citizen Investment Trust
  3. Social Security Fund



Declared relief package under the Social Security Organization:


The Government of Nepal deposited the amount to be contributed by the employees and the employers to the social security fund for the month of Chaitra.  Government of Nepal has deposited 18 crores 66 lakh amount of 33,0400 employees from 861 employers of the month of Chaitra 2076. Similarly, Citizen Investment Trust has declared 10% less in the interest rate to the loan taken by its member till the month of Ashad 2077.



Immediate Act to be done by the Social Security Organization


The contributor/member of Social Security Fund (SSF) and Employee Provident Fund  (EPF) (Employer’s portion as well as employee’s portion) need to be deposited at the respective organization by Government of Nepal for 6 months up to  Bhadra 2077 starting from Chaitra 2076.   It will help the employer to deduct their monthly operation cost. Even if an employer is thinking of retrenchment of their employees, it may turn into lay-offs for certain months or till the full operation of the business.


Similarly, Employee Provident Fund (EPF) and Citizen Investment Trust (CIT) shall provide the loan up to 90% for the period of 1 year with the interest rate of 2% only.  Even SSF and EPF can allow advance against the PF or SF contribution made by the employee to the tune of 75 per cent of PF/SSF deposits or equivalent to six months' salary, whichever is lower.  The interest rate of the amount may not be exceeding 0.5%.


Or if it is possible, Social Security Organization shall provide interest-free loans for the payment of wages to employees of business entities that have suspended their activities in connection with the announcement of quarantine. Among the measures, the government shall strengthen vocational training centres.



Social Security Schemes declared by other countries


 In China, provinces are allowed to exempt medium, small and micro-sized enterprises from employers’ contribution to three social insurance schemes for up to five months, namely: pension, unemployment and employment injury. Larger enterprises can reduce their contribution by 50 per cent for up to three months.   The Chinese province of Hubei can apply more favourable measures. The measure waives SMEs’ contributions for up to five months as well (depending on impact), and halves large enterprises’ contributions for up to three months (depending on impact). Enterprises classified as being in “operational crisis” can apply to delay contribution payment for up to six months.


Viet Nam suspended the payment of social insurance premiums into the retirement and survivorship fund for a maximum of 12 months and without late payment interest charges for businesses facing difficulties caused by the COVID-19 epidemic.


The Employee Provident Fund in Malaysia reduced worker contributions from 11 per cent of their salary to four per cent. This is expected to increase the cash on hand in households by some MYR 10 billion ($US2.25 billion) .


 In Thailand, the SSO will reduce financial contributions by both employees and employers from five to four percent for six months with an extension of the deadline for financial contributions by both employers and employee for 3 months


(Here I have not included the social security scheme of developed countries, as an example, USA and Canada have provided the unemployment allowance up to USD 1200 per person. Similar schemes are provided by Italy, Spain and Germany too)




Under this Covid-19 critical situation of Social Security Organizations shall provide and remedies to improve the life of its contributor and members. The existing Social Security Organization cover the certain risk to only the Industrial and Organized workers providing benefits only in certain contingencies.  Even in India, the state of Uttar Pradesh will provide compensation to poor workers via online payments if they lost their job due to the pandemic. Vegetable vendors, construction workers, rickshaw pullers, auto-rickshaw drivers, and temporary staff at shops will be targeted by this measure. 


In responding to the COVID-19 crisis, many governments utilize their unemployment protection schemes to ensure income security for workers. Countries use in particular four main instruments: expansion of unemployment benefits; wage subsidies, expansion or introduction of partial unemployment benefits to compensate for crisis-induced reductions in working hours; and employment services to complement income support to unemployed workers.  An additional measure put in place was the relaxation of job-seeking pre-conditions associated with unemployment insurance payments.


Pradeep Thapa is a corporate lawyer and providing legal service to different national and multinational companies in Nepal.  He is a guest lecture to law school in Kathmandu and teaching business law from last 10 years in different business college too.  He has completed LL.M from Kathmandu School of Law and associates with Prime Law Associates. If you need any further information, you can directly write to him at


Role of Social Security Organisation during Covid-19
Pradeep Thapa

Posted By: Pradeep Thapa

Views: 1704

Posted On: 22-April-2020