The new pension scheme for the informal sector will be open for subscription from February 15, a government notification said. Announced by Finance Minister Piyush Goyal in the Budget 2019, Pradhan Mantri Shram Yogi Maandhan (PMSYM) scheme will be open for unorganised sector workers under the age of 40 years earning up to Rs 15,000 every month.
The pension scheme entails a minimum monthly pension of Rs 3,000 after the age of 60 years to its beneficiaries. Over the next five years, the government is expecting the scheme to benefit 10 crore informal sector workers.
"This Scheme may be called the Pradhan Mantri Shram Yogi Maandhan, 2019. It shall come into force on the 15th day of February, 2019... the unorganised workers have option to become the members of the Scheme, on and from the 15th day of February, 2019," the notification issued by the Ministry of Labour and Employment said.
The scheme will cover unorganised workers who are working or engaged as home based workers, street vendors, mid-day meal workers, head loaders, brick kiln workers, cobblers, rag pickers, domestic workers, washer men, rickshaw pullers, landless labourers, agricultural workers, construction workers, among others.
Only the workers between the age of 18 years and 40 years can avail the benefits of PMSYM scheme, the notification added. The contributions from workers will change depending on the applicant's age. Applicants at the age of 18 years would have to contribute Rs 55, whereas workers at the age of 29 years would pay Rs 100. Those in the upper age limit of 40 years will have to pay Rs 220. The government will then contribute the same amount as the workers.
The new pension scheme comes with certain riders, though. Beneficiaries need to have a bank account linked with their Aadhaar number to avail its benefits. Informal workers already covered under the National Pension Scheme, the Employees' State Insurance Corporation Scheme or Employees' Provident Fund Scheme cannot avail the PMSYM scheme. Workers who are income-tax assessees are not be eligible, either.
The scheme also provides that if a subscriber has given regular contributions and died due to any cause, his spouse shall be entitled to continue with the scheme subsequently by payment of regular contribution. Children of the subscriber cannot be named as nominees, though. The spouse can also exit the scheme by receiving the share of contribution paid by deceased subscriber along with accumulated interest.
In case of permanent disablement of a subscriber, his or her spouse will be entitled to continue with the scheme or exit by receiving the share of contribution, with interest. In case of death of a pensioner, his or her spouse shall be only entitled to receive 50 per cent of the pension.
The government has already allocated Rs 500 crore for the PMSYM scheme and additional funds will be provided as needed, the Interim Finance Minister had told the Parliament in his Budget speech.