KATHMANDU: A government-appointed commission has suggested increasing the retirement age of civil servants and changing the age limit for senior citizens to receive social security allowances.
The High-Level Economic Reforms Recommendation Commission has recommended raising the retirement age for government employees from 58 to 60 years, and the age for receiving senior citizen allowances from 68 to 70 years.
The commission has also proposed not increasing social security allowances for the next five years. After that, it has suggested increasing the amount only once every two years, based on inflation.
Another important recommendation is to charge a 1.5% tax on salaries and wages to support the social security fund. The commission also suggested including informal sector workers in the contribution-based social security system.
To improve management, it wants all social security services to be linked to the national identity card and has asked the government to create a single system to collect and manage social security data. It has recommended that the Ministry of Labor, Employment, and Social Security take responsibility for this.
The commission also advised that the total spending on social security should be kept below 4% of the country’s GDP and under 15% of the federal budget over the next five years.
In addition, the commission wants the child allowance for children under five to be expanded to all districts, not just the current 25, especially for poor families.
To support the growing costs of health insurance, it has suggested collecting health taxes on tobacco, cigarettes, and alcohol, and using that money in the insurance fund. It also said the government should pay off the current debts of the Health Insurance Board.
The report also includes suggestions to change the scholarship system in medical education. Currently, 75% of students in government medical colleges receive full scholarships. The commission recommends reducing this to 25% full scholarships and giving 25% of students partial scholarships instead.
Lastly, the commission has urged the government to invest money from the Employees Provident Fund, Citizens Investment Fund, and Social Security Fund in projects that give high returns.
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