Atal Pension Yojna
Atal Pension Yojana (APY), a pension scheme for unorganised sector workers such as personal maids, drivers, gardeners etc, was launched in June 2015 by the government. This social security scheme was introduced as a replacement to previous government’s Swavalamban Yojana NPS Lite, which wasn’t well accepted by people.
APY aims to help these workers save money for their old age while they are working and guarantees returns post retirement. The scheme also promises a co-contribution by Central Government of 50% of the total prescribed contribution by a worker, up to Rs. 1000 per annum, but only to those who joined APY before 31.12.2015. Further, this co-contribution would be made only for 5 years, from FY 2015-16 to 2019-20 in the eligible cases subject to conditions mentioned below.
You are eligible for the Atal Pension Yojana if you are:
- An Indian citizen
- Have a valid bank account
- Are between 18 and 40 years of age.
What is the monthly contribution and mode of payment
APY is a periodic contribution based pension plan and promises a fixed pension of Rs 1000/ Rs 2000/ Rs 3000/ Rs 4000 or Rs 5000. Your monthly contribution depends upon the fixed amount of monthly pension you want and the age when you start Contributions end and pension starts at 60 years of age. Therefore, even if you join APY at 40 years of age you need to pay premium for a minimum of 20 years to avail the pension. The following table elaborates on the monthly contributions based on your pension plan and age.
It guarantees a pension range of between Rs. 1,000 and Rs. 55,000 (as described above) to its subscribers. The scheme allows the subscriber to reduce or increase their pension over the accumulation phase, at least once a year.
In the event of death of a the subscriber, the spouse will be entitled to identical pension until the time of his death. In the event of the death of both spouses and the subscriber the nominee is eligible to receive pension benefits which the subscriber has earned up to the age of 60.
However , if the subscriber dies prior to the age of 60, their spouse will be able to either leave the plan and claim the accrued amount or keep the account in the name of the subscriber during the remaining years of vested benefits. A spouse who is a subscriber will be entitled to the same amount of pension as the subscriber up to the dies of his spouse, in the second scenario.
Restrictions on contributions from the government
If, however, you are member of a different social security plan and are taxpayer, you’re not eligible to government co-contribution. For instance, those who belong to those who belong to the Social Security System that are covered by the following laws will not be able to receive a government co-contribution.
- Employees’ Provident Fund & Miscellaneous Provision Act, 1952.
- The Coal Mines Provident Fund and Miscellaneous Provision Act, 1948.
- Assam Tea Plantation Provident Fund and Miscellaneous Provision, 1955.
- Seamens’ Provident Fund Act, 1966.
- Jammu Kashmir Employees’ Provident Fund & Miscellaneous Provision Act, 1961.
- Other Social Security Scheme.
How to Apply
Visit the branch of your bank or post office in which your savings account is or you can start a savings bank account if there isn’t one. You can fill out the application form for APY.
If you’re a web experienced consumer, it is possible to be enrolling for APY on your savings account via the internet banking system and select auto debit to make your contribution. The amount of the premium will be deducted starting at the age of enrollment until 60 years old.
Although, the top banks across the nation offer this service via internet banking, this service is not offered by all banks. You could be required to make a trip at your bank to be accepted.
How do I apply for an APY through online
Log in to your Netbanking account. Choose ‘Social Security Schemes’ under the ‘My Account tab. A new page will be displayed in your browser. Select the dropdown’select scheme’ and select Atal Pension Yojana. Select the number of your savings account you would like to join to the scheme, and then submit. When you submit this form, you will be presented with an choice to choose your customer Identification (CIF) code. Choose the CIF generated by the system-generated and then submit.
Following this step after this step, an e-form appears at the top of your screen. Follow the directions in the form. The bank information and personal information provided to the bank during the process when you open your bank account are retrieved by default. There will be few options that request additional contact information such as Aadhar number, email address that were not provided to the bank when opening the account. It is not necessary for banks to supply Aadhaar number when opening an APY account. However, it is recommended to supply Aadhaar number to verify the identity for the user. In the tab for personal information you’ll have an option to submit the details of the nominee.
After submitting the nominee’s details, pick the pension details: The amount of pension, the period for which contributions are made that could be quarterly, monthly or half-yearly as well as the amount of contribution. Complete all the information carefully before submitting and downloading acknowledgement.
You can sign up for APY electronically by clicking a few buttons however there is no option to opt out of it on the internet. If you want to stop receiving APY you must go to the branch of your bank’s home which requires some paperwork, and could be a tedious job.
Account Maintenance charges
Penalties for Default
Deduction would be made in the subscribers account for account maintenance charges and other related charges on a periodic basis. Once the account balance in the subscriber’s account becomes zero due to deduction of account maintenance charges, fees and overdue interest, the account would be closed immediately. If there’s a continuous default for 6 months, you pension account will be freezed and if there’s a continuous default for 12 months, the account will get closed and whatever balance is left after the above said deductions will be given to the subscriber.
For delayed contributions a penalty of Rs. 1 per month for contribution of every Rs. 100, or part thereof, for each delayed monthly contributions. Which implies:
Rs.1 per month for contributions upto Rs.100 per month.
Rs.2 per month for contribution upto Rs.101 to 500 per month.
Rs.5 per month for contribution between Rs.501 to 1000 per month.
Rs.10 per month for contribution beyond Rs.1001 per month.