The Employees’ Provident Fund Organisation (EPFO) has been reported to be on the verge of giving its approval to a significant increase in the minimum monthly pension under the Employees’ Pension Scheme (EPS) of 1995. At present, many pensioners receive a mere ₹1,000 per month which is considered by many as the amount that lacks purchasing power in view of the continuous rise in living costs. The new floor would, however, increase the minimum amount payable to approx ₹7,500 per month.
Why Is The Hike Needed?
Pensioners and the labour organizations have raised the issue of the need for a revision in the EPS minimum pension every year. Current ₹1,000-per-month rate is incapable of bringing about any significant change with inflation already affecting the living standards by driving the costs of food, medicines, rent, and utilities etc. The government seems to have acknowledged and is willing to respond to this situation by acting—both to public demand and the need to support social security for the older population through retirement.
What’s Changing: Key Features
Higher Minimum Pension: The most major change announced is the rise from ₹1,000 to about ₹7,500 per month for the recipients qualified.
Dearness Allowance (DA) Potential: Furthermore, the proposal for a dearness allowance component to be linked with pensions is under discussion which means that pensions will henceforth be based on inflation and thus pensioners will not only survive but thrive as their purchasing power is preserved over time.
Digital Upgrades and Automatic Transition: The upgrade that the EPFO is proposing for its system (often referred to as EPFO 3.0) would not only ease the process flows and make record-keeping simpler but also allow the current pensioners to automatically receive the new amount without having to reapply.
Who Will Benefit?
The new pension floor will be of great assistance to poor retirees under the EPS-95 scheme who not only qualify for it (for example, having at least 10 years of service) but also are specifically defined by the criteria set for it. However, the ones who are already on the higher side of pensions may not feel much of a change. The process will be such that once the changes are formally implemented, the eligible pensioners would just about automatically receive the benefits since there wouldn’t be any need for new applications.
What Happens Next?
Despite the fact that the proposal has made significant progress, the formal clearance is still due through the EPFO board and perhaps the next budget session. There is no assurance of the implementation date and it will depend on the final notifications. It is advisable for pensioners to check that their EPFO records (bank account, Aadhaar, KYC) are current so that the transition to the higher pension can take place without any hitches.
Also Read: Gratuity Reform 2025: Key Changes In Contribution & Workers Who Will Benefit