In another landmark decision, the government has granted approval for a major increase of EPS pension to ₹7,000 per month effective from 2025. This long-awaited move gives some relief to lakhs of retired workers under the Employee Provident Fund Organisation (EPFO). Along with the hike in pension, pensioners shall also be given DA benefits, which will only increase their monthly income.
Why The Change?
EPS pensioners especially under what is called EPS-95 have been crying foul of the meager ₹1,000 per month pension which had remained unchanged since 2014. Various retirees associations and trade unions were in fact lobbying for the increase for many years citing inflation and high cost of living. Their voice has finally been heard, and an increase of ₹7,000 as minimum pension is viewed as a significant step towards dignified living of older citizens.
Dearness Allowance Inclusion
DA inclusion is by far the biggest highlight of this new pension scheme. By introducing DA, the government has decided to link inflation to EPS pensions starting from the base pension amount of ₹7,000. In this way, pensioners are assured of periodic increments according to the changing economic environment, thus adding sustainability to the goings of the pension system.
Suppose the present DA rate is 20%; then each EPS pensioner will receive ₹8,400 per month (₹7,000 base + ₹1,400 DA), which constitutes quite a generous jump in revenue.
Who Profit From?
This upgrade in the minimum pension is primarily for pensioners under the EPS-95 scheme who were retired with less monthly contributions. The move is expected to benefit over 65 lakh pensioners. The increase shall be applicable automatically to eligible pensioners, and no fresh application will be needed.
However, the amount that is actually received shall depend on the work history of the person and also the length of service. Detailed calculation tables shall be released by EPFO shortly, which will enable pensioners to find out the exact revised pension.
Implementation Timeline
Implementation of the new pension rates will be phased over time beginning July 2025. Since the EPFO offices across the country have started to upgrade their systems, it is expected that disbursements on the new rates including DA will begin by August 2025′ along with arrears from the effective date.
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