Banking channel mandatory for distribution of social security allowance

KATHMANDU, NOVEMBER 26

The Government of Nepal has made it mandatory for all 753 local levels to distribute social security allowance to beneficiaries through banking channel.

A notice recently published by the Ministry of Home Affairs in the Nepal Gazette said the provision was stipulated in line with Section 17 of the Social Security Act-2018. The Section reads, “The payment of social security allowance shall be made only through the banking system in such area and from such date as specified by the Government of Nepal in a published notice in the Nepal Gazette.”

This provision has come into effect from November 16 in 340 local levels, while 159 local levels shall start distributing social security allowance through banking system from 14 March 2021, 247 local levels from 16 July 12021, the and remaining seven (Mikwakhola, Netrawati Dabjong, Ruby Valley, Narphu, Junichade, Thalara and Saipal rural municipalities) from 17 November 2021.

According to the notice, the local units shall distribute social security allowance on the basis of identity cards. The concerned local level provides identity cards in the prescribed format to persons entitled to social security allowance. The identity of the guardian or caretaker of the person entitled to enjoy social security allowance is also mentioned in the identity card. The prevailing law requires the local units to review and update the records of identity cards.

Senior citizens (Dalit), senior citizens (single women), senior citizens (above 70 years) and senior citizens of the specified areas benefit from security allowance of Rs 2,000, Rs 2,000, Rs 3,000 and Rs 2,000 per month respectively.

Similarly, differently-abled persons bearing red card and blue card get Rs 3,000 and Rs 2,000 accordingly.

Likewise, persons belonging to endangered ethnic groups enjoy allowance of Rs 3,000.

Children from Karnali region, who are below five years and Dalits, get Rs 400. The allowances are distributed through the concerned local level on a four-monthly basis.

Currently, the local levels have been distributing allowance in the form of cash where there are no banks and financial institutions.

After the notice was published in the Nepal Gazette, allowance will have to be distributed through banking channel by opening bank accounts of beneficiaries within the stipulated time.

The government has already issued the ‘Strategy on Payment of Social Security Allowances through Electronic System’ to facilitate distribution of social security allowances in a more effective, systematic, transparent and beneficiary-friendly manner.

According to MoHA, the need to broaden and automate the payment system prompted it to issue and implement the strategy as part of paradigm shift to banking channel from a cashbased system.

Social security allowance was introduced in 1994. According to the Department of National ID and Civil Registration, there are nearly 3.21 million beneficiaries of social security allowance and the government had allocated a budget of Rs 68.16 billion for the programme last fiscal. Many of the beneficiaries depend on social security allowance to support their medical care.

 

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