KATHMANDU, Sept 10: The government could introduce unemployment benefits -- a major social security scheme -- to industrial workers, if the understanding reached between Ministry of Finance (MoF) and trade unions comes into implementation.
The new scheme is being worked out after the six influential trade unions compelled the government to utilize the money -- that the laborers contribute while paying the newly imposed one percent social service tax -- for the benefits of the workers themselves.
The unions had refused to pay the tax -- imposed to all income earners with the objective of creating social security fund -- if the government utilized the money for the benefits of other groups. They, however, agreed to pay the tax after the government proposed to manage the fund generated from the workers separately and utilize it to pledge unemployment benefits.
The scheme is still being discussed at the technical level and yet to be approved though. Going by the new scheme that the MoF has committed to the unions, the government will pledge a minimum living cost to the workers, who lose jobs, to support their livelihood through the unemployment period.
“The support amount and number of workers to be covered at a given period under the scheme will be worked out and finalized by a high-level technical committee, which will be formed soon,” said Finance Minister Surendra Pandey at the Finance and Labor Committee of the legislature-parliament.
According to Pandey, the government will create a Workers Welfare Fund, in which it will deposit the money collected from the newly imposed one percent tax, contribute additional one percent from government´s side and also make employers contribute another one percent, to finance the unemployment scheme.
The government has argued that the new scheme will not only cover the productive working groups during the rough period, but will also create an environment whereby the workers need not worry about how to manage their livelihood during the unemployment period.
“If effectively implemented, it will pave way for the introduction of flexible labor regime,” said a source.
However, as other income groups will also contribute to the social security fund, the government has said the technical committee will also work out separate social security schemes to cater to them.
It has floated schemes like medical benefits and health insurance for discussions.
The government has estimated to collect around Rs 1 billion from the new tax imposed this year. And its initial plan was to use the fund to finance existing social programs such as senior citizens allowances.
However, it has initiated exercises to devise the new sustainable social security schemes after the trade unions strongly demanded the government to use the fund for the benefits of the segment which contributes the money.
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