The Effects of Social Security Allowance (SSA) on the Welfare of Rural Elderly in Nepal
- Ashesh Shrestha
Old age often brings financial hardship, particularly in informal economies like Nepal’s, where savings and pension access are limited—especially for women with longer life expectancies. To address old-age poverty, governments have introduced social security systems to support retirement savings, mitigate longevity risk, and ensure income stability . Social security is a recognized human right under the Universal Declaration of Human Rights.
In Nepal, Article 43 of the Constitution guarantees social protection for vulnerable groups, operationalized through the Social Security Program since 2008. The Senior Citizens’ Allowance-introduced in 1994-now forms part of six major schemes, covering around 3 million individuals (11.34% of the federal budget as of FY 2022). Eligible elderly receive NPR 4,000 monthly (or NPR 2,600 for Dalits and Karnali residents aged 60–68).
Despite this investment, the impact of Social Security Allowances (SSAs) on rural elderly welfare remains underexplored. Global evidence (e.g., China, Mexico) shows cash transfers improve elderly well-being (Huang & Zhang, 2021; Galiani et al., 2016), but little is known about how Nepali beneficiaries use SSA and its effect on their subjective well-being. This study applies Amartya Sen’s Capability Approach (1999) to assess how SSA influences economic, health, and agency-related capabilities in rural areas of Nepal.
