Govt relaxes rules to make Atal Pension Yojana more acceptable
21 August 2015
The government has modified the provisions of the Atal Pension Yojana (APY) to make the scheme more acceptable amongst informal sector workers and make the scheme more viable.
Subscribers will now have an option to make the contribution on a monthly, quarterly or half yearly basis instead of on a monthly basis earlier. The provision on discontinuation of payment of contribution has also been substantially modified in favour of the subscriber by simplifying penalty on delayed payment
The Atal Pension Yojana (APY), launched by Prime Minister Narendra Modi at Kolkata on 9 May, provides for a minimum guaranteed monthly pension of Rs1,000 / Rs2,000 / Rs3,000 / Rs4,000 / Rs5,000 per month at the age group of 18-40 years.
The government has since received certain suggestions, including from the state governments, regarding providing certain relaxations for informal sector workers, having intermittent incomes, from the provision of mandatory monthly contributions under the scheme of APY and also removing the penal provisions for non-contribution under APY to make the scheme more viable.
The government has since examined the APY scheme and necessary revisions have been made in the scheme to increase the acceptability of the scheme amongst informal sector workers.
Under the modified provisions of the scheme, individual subscribers will have an option to make the contribution on a monthly, quarterly, half yearly basis instead on a monthly basis earlier.
Discontinuation of payment of contribution provision has been substantially modified in favour of the subscriber. The account will not be deactivated and closed till the account balance with self-contributions minus the government co-contributions becomes zero due to deduction of account maintenance charges and fees.
Also, the penalty on delayed payment has been simplified to Re1 per month for contribution of Rs100, or part thereof, for each delayed monthly payment instead of different slabs given earlier.
Similarly, premature exit from the scheme before sixty years of age was not permitted earlier except in exceptional circumstances, ie, in the event of the death of the beneficiary or terminal disease. Now the modified provision permits the subscriber to voluntarily exit with the condition that:
- The subscriber shall only be refunded the contributions made by him to APY, along with the net actual interest earned on his contributions (after deducting the account maintenance charges) and ;
- The government co-contribution, and the interest earned on the government co-contribution, will not be returned to such subscribers.