As a monumental step that offers a sigh of relief to millions in pension funds, a drastic revision in Employees Pension Scheme (EPS-95) has occurred. By May 2025, the lowest monthly pension will have been increased to ₹7,500, a dramatic change since previously it was a paltry ₹1,000 in a month. Through the ruling of the Supreme Court, it is assumed that this shift will favor close to 78 lakh pensioners in India.
Why the Hike Was Needed
Over the years, pensioners in the EPS-92 have been having a rough ride with their monthly payouts in the form of low pension payment that could hardly sustain the basic living. Due to inflation and ever-increasing cost of healthcare, the Rs. 1,000 pension was not sustainable any more. More than ten years, retirees and advocacy groups were pressing the authorities to revise. The recent raise is not only a monetary compensation, but an admittance of the worth and safety each retiree is entitled to.
Dearness Allowance Provides an Additional Relief
What is more is that this hike will be accompanied by Dearness Allowance (DA). EPS-95 pensions will for the first time be inflation indexed with the DA being pegged to the All India Consumer Price Index. This implies that pensioners will get extra earnings that show the cost of living. Such as when the DA rate is 50 percent then total monthly pension may be 11,250 and it is equivalent to 1,35,000 per year.
How It Will Be Implemented
The new pension will then be directly deposited into the bank accounts of the pensioners using the Centralised Pension Payment System (CPPS) which will coordinate the payment of new pension in a timely way and in a uniform manner. The EPFO has come up with this system that does not create a delay at the regional level and benefits are easily given to the beneficiaries.
Who Stands to Gain
Eligibility of EPS-95 pensioner category includes the widow, dependents, and disable people and the hike is applicable in all kinds of cases. It also helps the people that made higher contributions of pensions, according to their real wage. To them, this increment will either spell the difference between living hand to mouth and a comfortable secure retirement.
Looking Ahead
This pension reform is not only a change of policy, but it is a shift towards social justice. Through bringing pensions in line with the realities of the economy, the government has realized the efforts of the economy of India. The economic cost is also sizeable, but the social one is more remarkable.
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