Government Pension Scheme APY

The Government of India is extremely concerned about the old age income security of the working poor and is focused on encouraging and enabling them to join the National Pension System (NPS).  To address the longevity risks among the workers in unorganised sector and to encourage the workers in unorganised sector to voluntarily save for their retirement, who constitute 88% of the total labour force of 47.29 crore as per the 66^th Round of NSSO Survey of 2011-12, but do not have any formal pension provision, the Government had started the Swavalamban Scheme in 2010-11. However, coverage under Swavalamban Scheme is inadequate mainly due to lack of clarity of pension benefits at the age after 60.

The Finance Minister has, therefore, announced a new initiative called Atal Pension Yojana (APY) in his Budget Speech for 2015-16. The APY will be focussed on all citizens in the unorganised sector, who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA) and who are not members of any statutory social security scheme. Under the APY, the subscribers would receive the fixed pension of    Rs. 1000 per month, Rs. 2000 per month, Rs. 3000 per month, Rs. 4000 per month, Rs. 5000 per month, at the age of 60 years, depending on their contributions, which itself would vary on the age of joining the APY. The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more. The benefit of fixed pension would be guaranteed by the Government. The Central Government would also co-contribute 50% of the subscriber’s contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years, i.e., from 2015-16 to      2019-20, who join the NPS before 31^st December, 2015 and who are not income tax payers. The APY would be launched from 1^st June, 2015. The existing subscribers of Swavalamban Scheme would be automatically migrated to APY, unless they opt out.

Benefit of APY:   Fixed pension for the subscribers ranging between Rs. 1000 to Rs. 5000, if he joins and contributes between the age of 18 years and 40 years. The contribution levels would vary and would be low if subscriber joins early and increase if he joins late.

Eligibility for APY:       Atal Pension Yojana (APY) is open to all bank account holders who are not members of any statutory social security scheme. 

Age of joining and contribution period:   The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

Focus of APY:     Mainly targeted at unorganised sector workers.

Enrolment and Subscriber Payment:       All bank account holders under the eligible category may join APY with auto-debit facility to accounts, leading to reduction in contribution collection charges.

Enrolment agencies:    All Points of Presence (Service Providers) and Aggregators under Swavalamban Scheme would enrol subscribers through architecture of National Pension System.  

Operational Framework of APY:   It is Government of India Scheme, which is administered by the Pension Fund Regulatory and Development Authority. The Institutional Architecture of NPS would be utilised to enrol subscribers under APY.

Funding of APY: Government would provide (i) fixed pension guarantee for the subscribers; (ii) would co-contribute 50% of the subscriber contribution or Rs. 1000 per annum, whichever is lower, to eligible subscribers; and (iii) would also reimburse the promotional and development activities including incentive to the contribution collection agencies to encourage people to join the APY.

Age of Joining, Contribution Levels, Fixed Monthly Pension and Return of Corpus to the nominee of subscribers

The Table of contribution levels, fixed monthly pension to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period is given below. For example, to get a fixed monthly pension between   Rs. 1,000 per month and Rs. 5,000 per month, the subscriber has to contribute on monthly basis between Rs. 42 and Rs. 210, if he joins at the age of 18 years. For the same fixed pension levels, the contribution would range between        Rs. 291 and Rs. 1,454, if the subscriber joins at the age of 40 years. 

Benefits To Ex-Defence Senior Citizens

The Government has provided certain concessions to senior citizens who have worked in the Armed Forces. Retired Defence Personnel enjoy special cost benefits in sectors such as travel, health, housing, reemployment and pension. Listed below are the various schemes applicable to them in the related field.

Medical Amenities

Benefits to retired defence personnel also include a range of medical facilities. Ex-servicemen and their families are allowed to go for in-patient and outpatient treatment at military hospitals at any time. The Ex-servicemen Contributory Health Scheme has helped them to a great extent. Non-pensioner ex-servicemen are provided financial assistance to meet medical expenses.

If military personnel are unable to avail medical treatment at military hospitals, they are provided around 75-90 per cent financial assistance from the Kendriya Sainik Board for the cost of treatment incurred at other hospitals as on March 31, 2007. This helps them to take care of their medical needs quite conveniently.

Pension Facilities

The nature of retirement or release from service determines  for Armed Forces personnel. On normal retirement or release from service after the completion of the prescribed tenure, a retiring/serving pension is paid. In cases of disablement in non-battle casualty cases, disability pension is sanctioned on the recommendation of the appropriate medical authority. Personnel who have been injured or wounded during war or war like operations are granted a special pension known as War Injury Pension.

Usually, the retiring pension is calculated at 50 per cent of the average computable emoluments drawn during the last 10 months. The commutation pension given to defence personnel is 43 per cent for the officers and 45 per cent for personnel below officer's rank. Civilians receive only 40 per cent as on March 31, 2007. These facilities enable them to lead a good standard of life even after retirement.

Family pension is given to the dependants of those defence personnel who passed away after retirement or while serving. These facilities are meant to provide financial stability to retired personnel and encourage others to join the defence forces.

Saving Instruments

The Senior Citizens Saving Scheme(External website that opens in a new window) or SCSS is a useful savings instrument available to ex defence service personnel. This scheme was recently launched by the Central Government and allows retired defence personnel to invest in this scheme at any stage of their life.

This SCSS provides retired defence personnel and others an interest rate of 9 per cent on their deposits, as on March 31, 2007. The Government has also been introducing other financial schemes and programmes for the benefit of retired defence personnel and their dependants.

SCSS are available through any post office that does savings bank work. There are also 24 nationalised banks and one private sector bank (ICICI Bank) through which senior citizens Saving Schemes are available.

Travel Concessions

Travel concessions are available for road, rail as well as air travel. Indian Railways allows free travel in air conditioned (AC) II tier coaches of mail or express trains and AC III tier in Rajdhani trains for winners of gallantry awards such as Param Vir Chakra, Mahavir Chakra and Vir Chakra.

As far as war widows of defence personnel are concerned, they are allowed a concession of 75 per cent on the fare for travelling in second class. In planes, 75 per cent concession is available to retired defence personnel who are Level I or Level II gallantry award winners. The Indian provides a 50 per cent discount to retired defence officials who are gallantry awardees on airline tickets, as on March 31, 2007.

Re-employment of Ex-servicemen

Retired defence personnel may earn a living even after retirement. The Central and state governments provide a number of concessions to ex-servicemen(External website that opens in a new window) (ESM) for their re-employment in Central or State government posts. This consists of reservation of posts, relaxation in age and educational qualifications and exemption from payment of application or examination fees. While giving jobs, a special priority is provided to disabled ex-servicemen and dependants of deceased service personnel on compassionate grounds. Here are a few details on employment opportunities for ex-servicemen(External website that opens in a new window).

• Central Government has reserved 10 per cent of Group "C" posts and 20 per cent of Group "D" posts for ex-servicemen
• Public Sector Units and nationalized banks provide 14.5 per cent reservation for Group "C" posts and 24 per cent reservation in Group "D" posts
• 10 per cent of posts of Assistant Commandant in the paramilitary forces are reserved for ex-servicemen.

The Directorate General of Resettlement(External website that opens in a new window) (DGR) registers or sponsors private ex-servicemen security agencies for providing security guards to various Public Sector Units and industries in the private sector. Some states have set up their own Ex Servicemen Corporations to provide security services in the state. The Department of Public Enterprises had issued instructions to all Public Sector Units to hire security personnel only from state ex-servicemen corporations or DGR sponsored Security Agencies. Currently there are around 1800 ESM security agencies that have provided employment to over 1,10,000 ex- servicemen.

The government has also set up self-employment schemes to help retired defence personnel set up small scale or medium scale businesses. The Self Employment Scheme for Ex Servicemen II and III (SEMFEX-II and SEMFEX-III) and the National Equity Fund Scheme are some such schemes. These schemes provide loans to ex servicemen for starting a small-scale business. The application for the sanction of a loan needs to be submitted to the Zila Sainik Board.

Other employment opportunities for Ex-Servicemen are the Coal Transport Companies Scheme and the Coal Tipper Scheme. Petrol Pumps, LPG and Kerosene Dealerships have been allotted to personnel with disabilities that can be attributed to military service. Preference is given to ex-Servicemen, disabled defence personnel and widows in the allotment of public telephone booths. In the National Capital Region of Delhi, ex defence personnel are involved in operating Mother Dairy booths, vegetable stores and Compressed Natural Gas stations.

Housing Benefits

Housing is a mandatory requirement in everyones life. Whether you are retired from the defence forces or a regular senior citizen, having a house means a lot when it comes to asserting your independence. Keeping this in mind, the central government as well as several state governments has come up with plans and schemes to enable retired defence personnel to buy a home or piece of land. Ex military personnel may also apply for financial assistance to construct a home..

The Army Welfare Housing Organization(External website that opens in a new window) or AWHO is a society that is responsible for constructing houses for serving men, retired army personnel and widows of army personnel at selected stations in the country. Recently, AWHO has launched the 'Jai Jawan Awas Yojna' programme to construct economical houses for serving Junior Commissioned Officers and Other Ranks of the Army. These houses are being made near Army cantonments so that families residing there have easy access to facilities such as army hospitals and army schools in the area.

Senior citizen pension scheme in India: 10 things to know about Pradhan Mantri Vaya Vandana Yojana

The Pradhan Mantri Vaya Vandana Yojana is a pension scheme announced by the Government of India exclusively fo senior citizens, it will be available from 4th May, 2017 to 3rd May,2018.
One can subscribe to PMVVY Pension Scheme offline as well as online through the Life Insurance Corporation of India.

Influenced by the success and popularity of Varishtha Pension Bima Yojana 2003 and Varishtha Pension Bima Yojana 2014 schemes and to protect elderly people aged 60 years and above in the falling interest regime, the Modi government recently announced the launch of a simplified scheme of assured pension, called Pradhan Mantri Vaya Vandana Yojana (PMVVY). The scheme is currently being implemented through the Life Insurance Corporation (LIC) of India and was formally launched by Finance Minister Arun Jaitley in New Delhi recently.

As per the scheme, on payment of an initial lump sum amount ranging from a minimum purchase price of Rs 1,50,000 for a minimum pension of Rs 1000 per month to a maximum purchase price of Rs 7,50,000 for a maximum pension of Rs 5,000 per month, subscribers will get an assured pension based on a guaranteed rate of return of 8% per annum, payable monthly.

Here are 10 things to know about the scheme:

1. The Pradhan Mantri Vaya Vandana Yojana is a pension scheme announced by the Government of India exclusively for senior citizens. It will be available from 4th May, 2017 to 3rd May, 2018.

2. One can subscribe to the PMVVY Pension Scheme offline as well as online through the Life Insurance Corporation of India.

3. PMVVY Pension Scheme provides an assured return of 8% p.a. payable monthly (equivalent to 8.30% p.a. effective) for 10 years.

4. Pension is payable at the end of each period, during policy term of 10 years, on monthly/ quarterly/ half-yearly/ yearly basis as chosen by the pensioner.

5. Death Benefit: On the death of the pensioner during the policy term of 10 years, the purchase price shall be refunded to the beneficiary.

6. Maturity Benefit: On survival of the pensioner to the end of the policy term of 10 years, purchase price along with final pension installment shall be payable.

7. Eligibility Conditions and Other Restrictions:

Minimum Entry Age: 60 years (completed)

Maximum Entry Age: No limit

Policy Term: 10 years

Minimum Pension: Rs 1,000 per month
Rs 3,000 per quarter
Rs 6,000 per half year
Rs12,000 per annum

Maximum Pension: Rs 5,000 per month
Rs 15,000 per quarter
Rs 30,000 per half year
Rs 60,000 per annum

8. Payment of Purchase Price

The scheme can be purchased by payment of a lump sum purchase price. The pensioner has an option to choose either the amount of pension or the purchase price.

The minimum and maximum purchase price under different modes of pension will be as under:

Mode of Pension  Minimum Purchase Price  Maximum Purchase Price

Yearly	Rs. 1,44,578/-	Rs. 7,22,892/-
Half-yearly	Rs. 1,47,601/-	Rs. 7,38,007/-
Quarterly	Rs. 1,49,068/-	Rs. 7,45,342/-
Monthly	Rs. 1,50,000/-	Rs. 7,50,000/-

9. Loan: Loan facility is available after completion of 3 policy years. The maximum loan that can be granted shall be 75% of the purchase price.

The rate of interest to be charged for loan amount shall be determined at periodic intervals. For the loan sanctioned in Financial Year 2016-17, the applicable interest rate is 10% p.a. payable half-yearly for the entire term of the loan.

Loan interest will be recovered from pension amount payable under the policy. The loan interest will accrue as per the frequency of pension payment under the policy and it will be due on the due date of pension. However, the loan outstanding shall be recovered from the claim proceeds at the time of exit.

10. Taxes: Statutory Taxes, if any, imposed on this plan by the Government of India or any other constitutional Tax Authority of India shall be as per the tax laws and the rate of tax as applicable from time to time. The amount of tax paid shall not be considered for the calculation of benefits payable under the plan.

Government Schemes For Senior Citizen They Must Know

Over the years, the government has launched various schemes and policies for older persons. These schemes and policies are meant to promote the health, well-being and independence of senior citizens around the country. Some of these programmes have been enumerated below.

Integrated Programme for Older Persons (IPOP)

This programme is run by the Ministry of Social Justice and Empowerment. Under this programme, grants are given for running and maintenance old age homes, day care centres, mobile medicare units, multi-facility care centre for older widows, etc. The main objective of the scheme is to improve the quality of life of older persons by providing basic amenities like shelter, food, medical care and entertainment opportunities, etc. Implementing agencies eligible for assistance under the scheme are panchayati raj institutions/local bodies, non-governmental voluntary organisations, etc. Funds under the scheme of IPOP are not released to the states, but released to the implementing agencies like NGOs, etc.

In the year 2016-17, a total of 396 old age homes were given grants under this scheme. The total grant amount was Rs 36.99 crore covering a total of 40,200 beneficiaries.

Action Point: Details of old age homes receiving grants under this are available on the ministry’s website. One can visit these homes and admit old age persons who have nobody to take care of.

Rashtriya Vayoshri Yojana (RVY)

This scheme is also run by the Ministry of Social Justice and Empowerment. This is a central sector scheme funded from the Senior Citizens’ Welfare Fund. The fund was notified in the year 2016. All unclaimed amounts from small savings accounts, PPF and EPF are to be transferred to this fund.

Under the RVY scheme, aids and assistive living devices are provided to senior citizens belonging to BPL category who suffer from age-related disabilities such as low vision, hearing impairment, loss of teeth and loco-motor disabilities. The aids and assistive devices, viz walking sticks, elbow crutches, walkers/crutches, tripods/quadpods, hearing aids, wheelchairs, artificial dentures and spectacles are provided to eligible beneficiaries. The scheme is being implemented by Artificial Limbs Manufacturing Corporation of India (ALIMCO), which is a public sector undertaking under the Ministry of Social Justice and Empowerment.

The estimated outlay of the Scheme is Rs 483.6 crore up to 2019-20. The scheme will be implemented in 260 districts and benefit 5,20,000 beneficiaries up to 2019-20. The list of selected districts and other features of the scheme are available on the PIB website. The beneficiary identification will be done by a committee at the district level headed by the district Collector and kits will be distributed in camps. Till date, the scheme has benefitted over 38,000 beneficiaries against the target of 5,20,000 by 2019-20.

Action Point: Get old-age people with such ailments in the identified districts to approach the district Collector’s office to know more about the upcoming camps and take advantage of the scheme.

Indira Gandhi National Old Age Pension Scheme (IGNOAPS)

The Ministry of Rural Development runs the National Social Assistance Programme (NSAP) that extends social assistance for poor households- for the aged, widows, disabled, and in cases of death where the breadwinner has passed away. This is in addition to the benefits that the state governments extend to these people. Under this scheme, financial assistance is provided to person of 60 years and above and belonging to family living below poverty line as per the criteria prescribed by Government of India. Central assistance of Rs 200 per month is provided to person in the age group of 60-79 years and Rs 500 per month to persons of 80 years and above.

Funds under the schemes of NSAP are released on the basis of reports submitted by States/UTs. A total of Rs 5901 crore was released under the scheme in 2016-17.

Action Point: Find out the details of the relevant state scheme and get eligible old age people around you apply for the pension.

Varishtha Pension Bima Yojana (VPBY)

This scheme is run by the Ministry of Finance. The Varishtha Pension Bima Yojana (VPBY) was first launched in 2003 and then relaunched in 2014. Both are social security schemes for senior citizens intended to give an assured minimum pension on a guaranteed minimum return on the subscription amount. These schemes are implemented through Life Insurance Corporation (LIC) of India, which is paid the difference between the actual yield earned by the LIC on the funds invested under the scheme and the assured return of 9 percent committed by the government. Both the schemes, VPBY 2003 and VPBY 2014, are closed for future subscriptions. However, policies sold during the currency of policy are being serviced as per the commitment of guaranteed 9 percent return announced by the government under the schemes. As on 31 March 2017, a total of 2,74,885 beneficiaries and 3,11,981 beneficiaries are being benefited under VPBY 2003 and VPBY 2014 respectively.

The Pradhan Mantri Vaya Vandana Yojana

The Pradhan Mantri Vaya Vandana Yojana (PNVVY) was launched in May 2017 to provide social security during old age. This is a simplified version of the VPBY and will be implemented by the Life Insurance Corporation (LIC) of India. Under the scheme, on payment of an initial lump sum amount ranging from Rs 1,50,000 for a minimum pension of Rs 1000 per month to a maximum of Rs 7,50,000/- for a maximum pension of Rs 5,000 per month, subscribers will get an assured pension based on a guaranteed rate of return of 8% per annum payable monthly/quarterly/half-yearly/annually. The duration of the scheme will be for a period of ten years and the scheme is opened for subscription for a period of one year i.e. from 4th May, 2017 to 3rd May, 2018. As on 30th November 2017, a total of number of 1,83,842 persons are being benefited under PMVVY.

Action Point: The PMVVY is open for subscription till May 2018. Get old age people around you who are eligible for this scheme to explore and subscribe.

National Programme for the Health Care of Elderly (NPHCE)

The Ministry of Health & Family Welfare had launched the ‘National Programme for the Health Care of Elderly’ (NPHCE) during 2010-11 to address various health related problems of elderly people. The major objectives under district level activities of the NPHCE are to provide dedicated health facilities in district hospitals, community health ccentres (CHC), primary health centres (PHC) and sub-centres (SC) levels through State Health Society. The healthcare facilities, being provided under this programme, are either free or highly subsidised.

The following facilities are being provided under the programme.

Geriatric OPD and 10-bedded geriatric ward at district hospitals.

Bi-weekly geriatric clinic at community health centres (CHC)

Weekly geriatric clinic at primary health centres (PHC)

Provision of aids and appliances at sub-centres

The Centre will bear 75 percent of the total budget and the state government will contribute 25 percent of the budget, for activities up to district level.

Action Point: As on date, the district-level activities of the programme have been sanctioned in 520 districts of 35 states/UTs. Check for districts in your state that have benefitted under this programme.