Employees’ Provident Fund Organisation (EPFO) has officially approved a sevenfold increase in the minimum monthly pension under the Employees’ Pension Scheme (EPS-95)—from ₹1,000 to ₹7,500.
The hike, effective April 2025, will benefit over 78 lakh pensioners across India, offering substantial financial relief amid rising inflation and cost-of-living pressures.
EPFO: Why the Pension Hike Was Needed
For years, EPS-95 pensioners have received a minimum pension of ₹1,000, a figure widely criticized as inadequate for basic living expenses.
With inflation driving up costs for healthcare, food, and housing, retirees—especially those from lower-income groups—have struggled to maintain financial independence.
Key drivers behind the hike:
- Inflationary pressures eroding purchasing power
- Medical and housing costs outpacing pension growth
- Trade union demands and legal advocacy for reform
- Social justice concerns for elderly citizens dependent solely on pension income
What Has Been Approved
The revised pension structure includes:
- Minimum monthly pension: ₹7,500 (up from ₹1,000)
- Dearness Allowance (DA): 7% added to base pension, totaling ₹8,025/month
- Automatic disbursal: No reapplication required; credited to Aadhaar-linked bank accounts
- Eligibility: EPS-95 members with at least 10 years of service
The inclusion of DA marks a significant shift, aligning EPS-95 pensions with inflation-indexed government schemes.
The All India Consumer Price Index (AICPI) will guide biannual revisions of the DA.
Supreme Court’s Role and Government Response
The pension hike follows a landmark Supreme Court ruling in May 2025, which mandated the increase and inclusion of DA.
The Court emphasized the need for dignified retirement income and directed EPFO to implement the changes without delay.
The Central Government and EPFO will jointly fund the revised pension, with final budgetary allocations pending approval from the Labour Ministry and Central Board of Trustees.
EPFO Revised Pension Implementation Timeline and Pensioner Actions
EPFO will update its systems and reflect the revised pension in accounts starting April 2025.
Pensioners are advised to:
- Update KYC and Aadhaar details
- Verify bank account information
- Submit life certificates if pending
EPFO will issue SMS alerts and revised pension slips to confirm disbursal.
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