EPS minimum pension hike: Is government increasing minimum EPS pension to Rs 7,500? Ministry responds

Many employee unions across the country have been pushing for a hike in the minimum Employees’ Pension Scheme (EPS) amount from Rs 1,000 to Rs 7,500. However, when the government was questioned about any plans to raise the minimum EPS pension, no increase was announced.

In response to a query in Lok Sabha this week, Shobha Karandlaje, the Minister of State for Labour and Employment, said that the government is committed to providing robust social security coverage to EPFO members while also considering the fund’s sustainability and future obligations.

Will the government increase the minimum EPS pension amount?

The issue was raised by Shiv Sena (UBT) MP, Bhausaheb Rajaram Wakchaure, in Parliament as the EPS-95 National Agitation Committee has been consistently asking for the minimum pension to be raised to Rs 7,500 per month along with dearness allowance (DA).

However, the government hasn’t announced any plan to raise the minimum pension from Rs 1,000 per month at present or specified a timeline for doing so.


Also read: EPFO 3.0: Government plans new pension scheme for formal and unorganised sector workers, claims report explaining how it will work

Government outlines how EPS pension fund is financed

The ministry explained that the Employees' Pension Fund corpus consists of

(i) Contribution by the employer at 8.33% of wages

(ii) Contribution from the central government through budgetary support at 1.16% of wages up to an amount of Rs 15,000 per month.

All benefits under the scheme are paid out of such accumulations. The fund is valued annually as mandated under Paragraph 32 of the EPS, 1995.

Wakchaure also asked whether the present EPS pension of Rs 1,000-2,000 per month is enough to ensure a dignified life for elderly workers.

Karandlaje responded: “The government is providing a minimum pension of Rs 1,000 per month to pensioners under the EPS, 1995, through budgetary support, which is in addition to the budgetary support of 1.16% of wages provided annually towards EPS to Employees' Provident Fund Organisation (EPFO).”

EPS 2026 scheme has superseded EPS 1995 scheme

The EPS 2026 scheme superseded the EPS 1995 scheme from July, 2026.

Early this month, the government notified the Employees' Pension Scheme (EPS), 2026, under the Code on Social Security, 2020, replacing the EPS, 1995, and Employees' Family Pension Scheme, 1971.

Key changes introduced under EPS-2026

While many provisions remain unchanged, the new EPS scheme introduces several changes, including:

-Pension claims to be settled within 20 days

-12% interest on delayed pension claims

-Higher pension provisions incorporated into the scheme

-Digital compliance requirements for employers

-Scheme renamed from Employees' Pension Scheme, 1995, to Employees' Pension Scheme, 2026

EPS pension formula

The pension calculation formula remains unchanged under the EPS 2026 scheme. Monthly Pension = (Pensionable salary × pensionable service) ÷ 70

Pensionable salary will continue to be the average monthly salary drawn during the last 60 months before exiting the pension fund.