In 1954, the Social Security Act was enacted. However, the then Government considered that the economic condition of the country at that time was not favorable for enforcement of the Social Security Act 1954. As a result, the ROYAL DECREE was enacted in lieu of the said Act.

In 1972, the Government by the Revolutionary Party decided that employees who sustained injuries or illness or who died as a result of working for the employer should be secured that they would receive compensation money.  As a result, the Government by the Revolutionary Party then issued a Notification of the Revolutionary Party No 103 dated 16 March 1972 under which a compensation fund was established in the Department of Labor with the intention to protection security to employees who were ill or injured in relation to performance of work. This Notification of the Revolutionary Party requires the employers to make contributions to the Compensation Fund to pay for compensation for employees in lieu of the employer; to pay for medical treatment expenses, to payment compensation for loss of monthly income; to pay the cost of physical rehabilitation of working capability; and to pay for funeral expense. However, the employer shall be required unilaterally to make contribution to the fund according to the risk of such category of business at the rate of 0.2 -2.0 percent. The Compensation Fund has started its management of the fund since 1 January 1974 under the supervision of the Department of Labor. This was the first step of actual social security.

Efforts to push for full realization of social security have been made continually consistently through the appointment of several committees to review the matter. Until 1981, the Committee charged with the preparation of social security scheme under the chairmanship of the Permanent-secretary of Interior, finally completed the draft of the Social Security Act A.D ....... in which the operation of the Act, the establishment of an administrative organization and the Contributions Fund; but unfortunately, this draft of the Social Security Act was not successful.

Until 1990, the Draft of the Social Security Act 1990 was approved by the National Assembly and went into force on 2 September 1990. Under this Social Security Act, the employees would receive protection in the capacity as the insured under a total of 7 circumstances, namely: illness or accident; physical disability; death not related to performance of work; child delivery; old age, child assistance and unemployment. In the initial stage tentative protection coverage shall be provided to places of business with over 20 employees and afterwards in 1993, it was extended to places of business with over 10 employees; and provides protection particularly in the case of illness, disability, and death which is not resulted from work performance and to child delivery on tentative basis. For this purpose, the employer, and employee and the Government have made contributions at equal rate: at 1.5 percent for old age and child assistance was covered in 1996 and the coverage of unemployment shall be provided protection coverage by means of enacting a Royal Decree when the operation was ready.

The Office of Social Security is attached to the Ministry of Interior and was established on 3 September 1990. The work related to social security was transferred from the Department of Public Welfare; and the work of the Office of Compensation Fund, the Department of Labor, was then transferred to be under the management of the Office of Social Security.

The Office of Social Security was transferred to be under the Ministry of Labor and Social Welfare on 23 September 1993.