Atal Pension Yojana : Benefits, Features & Eligibility

What is Atal Pension Yojana?

The Atal Pension Yojana, formerly known as the Swavalamban Yojana, is a government pension program. The APY was launched to create a universal social security system for eligible Indians, particularly the poor, vulnerable sections of society, and workers in the unorganized sector.

• The Atal Pension Yojana Scheme is directed by the Pension Fund Regulatory and Development Authority (PFRDA).
• The objective of the APY is that at the age of 60 years, the subscriber would get a fixed minimum pension depending on their contribution.
• The pension amount depends on the monthly contribution amount and period.

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Swavalamban Scheme

Swavalamban Scheme UPSC topic is necessary to learn as it has been reformed into the Atal Pension Yojana. Swavalamban Yojana was a micro-pension program backed by the government. It was launched in 2010 to maintain a habit of saving money for survival after retirement.

Highlights of Atal Pension Yojana

The Atal Pension Yojana scheme was launched on May 9, 2015, replacing the scheme name Swavalamban Yojana. It is controlled by the Pension Fund Regulatory and Development Authority (PFRDA) through the National Pension Scheme (NPS). NPS was launched in 2004 for government employees.

• Any citizen of India, both resident and non-resident, in the age group of 18 to 65, can join the National Pension System.
• The Atal Pension Yojana has been well-accepted by the people and has more than two and a half crore subscribers.
• Contributions in the APY Scheme are determined by the subscriber’s age and contribution amount. Therefore, if a subscriber joins when young, the monthly payment amount will be lower than a person entering the scheme at 40.
• Any bank account holder joining the APY Scheme must activate the auto-debit facility. The auto-debit facility reduces the contribution collection charges.

Eligibility of Atal Pension Yojana

The following are the criteria to be followed by the workers to be eligible for the Atal Pension Yojna:

• The Atal Pension Yojana subscriber must not be a member of any statutory social security scheme.
• Any citizen of India can join the Atal Pension Yojana with the following two conditions:
• The age of subscribers should be in the 18 to 40 age group.
• Citizens/subscribers should have a savings bank account.
• The subscriber must provide proof of an Aadhar Card/number and complete the Aadhar authentication process.
• The Atal Pension Yojana account or the saving account of the bank of the subscriber must be linked with the Aadhar card.

Atal Pension Yojana Benefits

The APY is a government scheme that came into force on June 1, 2015, whose main aim was to provide pensions to the aged group of unorganized workers who are not covered under any of the social security schemes.

The benefits of the Atal Pension Yojana are the following:

• Those subscribers who contribute between the age group of 18 to 40 years get a fixed amount of pension ranging between Rs 1000 and Rs 5000. after the age of 60.
• If the subscriber dies, his or her spouse will be entitled to the same benefits as the subscriber.
• The subscriber can select the nominee so that the indicative pension will be returned to the nominee in case of the spouse’s death.
• Due to unfavourable circumstances and people’s requirements, the traditional relations (joint families) have been converted to nuclear families, due to which mainly the elderly people’s positions get adversely affected (like loneliness, disease, etc.). Atal Pension Yojana can fulfil their needs after the age of 60, such as medical care.
• In addition, the APY helps India’s position on the World Happiness Index by making the elderly happy.
• The Atal Pension Yojana also contributes to economic growth by being eligible for tax benefits similar to the National Pension System.

Features the of APY Scheme

It is administered by the Pension Fund Regulatory and Development Authority through the National Pension System.

• Any citizen of India can join the Atal pension scheme.
• The minimum contribution period by any subscriber under the Atal Pension Yojana is 20 years.
• Subscribers can make contributions to the Atal Pension Yojana on a monthly, quarterly, or half-yearly basis.
• The contribution level would be low if the subscriber joined early and increased if it joined late.
• In the event of the premature death of the subscriber, that is, death before 60 years of age, the subscriber’s spouse who is contributing to the Atal Pension Scheme account can contribute for the remaining period till the original subscriber has reached the age of 60 years.
• The APY subscriber would receive the guaranteed minimum monthly pension of Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000, or Rs. 5000 at the age of 60 years based on his subscription to the scheme.
• The same pension is paid to the spouse after the death of the subscriber.
• Return of indicative pension wealth to the nominees after the death of a spouse
• The tax benefits include the additional deduction of Rs. 50,000 under section 80CCD(1).
• Subscribers must maintain the required amount in their savings accounts to avoid paying late payment penalties. The due date for monthly payments depends on the first contribution date.

Atal Pension Yojana Scheme Funding

Under the Atal Pension Yojana scheme, the government provides a fixed pension, and the Central Government would co-contribute 50% of subscribers’ contributions up to Rs. 1000 per year for 5 years, that is, from 2015-16 to 2019-20.

• If the person is eligible for the subscriber Atal Pension Yojana before 31st March 2016, is not an income taxpayer, and is not a beneficiary of any social security scheme,
• There is also the concept of the nominee, which means that if the subscriber dies, contribution levels, fixed monthly pension, and corpus return to the subscriber’s nominees.
• If a person joins the Atal Pension Yojana at the age of 18, then he can obtain a fixed monthly pension of between Rs. 1000 and Rs. 5000 per month by contributing between Rs. 42 and Rs. 210 every month, and if a person joins at the age of 40, the contribution will range between Rs. 291 and Rs. 1454 for the same fixed pension levels.

Atal Pension Yojana and PM Shram Yogi Mandhan Yojana

A comparison between Atal Pension Yojana and PM Shram Yogi Mandhan Yojana(PMSYMY) is mentioned below for better understanding.

• The maximum pension in Atal Pension Yojana will be 5000, while Pradhan Mantri Shram Yogi Mandhan Yojana will be 3000 rupees.
• After the subscriber’s death, after attaining 60 years, the spouse will get full payment under APY, while it will be 50% in Pradhan Mantri Shram Yogi Mandhan Yojana.
• After the death of both spouses, the money will be given to the nominee in Atal Pension Yojana, while it will be held back in the National Corpus Fund in Pradhan Mantri Shram Yogi Mandhan Yojana.

Similarities between Atal Pension Yojana and Pradhan Mantri Shram Yogi Mandhan Yojana (PMSYMY)

• Both schemes are for the unorganized sector.
• The subscribers should not be beneficiaries of other schemes of the Employee Provident Fund, the National Pension Scheme.

Current status of APY

According to the National Pension System Trust annual report, out of 4.2 crores of National Pension System subscribers, over 66%, or 2.8 crores, opted for the Atal Pension Yojana at the end of 2020–21. Apart from the enrollment record, the male-to-female subscription is a ratio of 57:43 in all states and UTs.

Atal Pension Yojana UPSC

This is an unavoidable topic for GS Paper 2 or Currents Affairs for the UPSC Exam. Candidates can also expect Atal Pension Yojana Essay in the upcoming UPSC Mains Exam. The aspirants willing to appear in the IAS Exam this year can also get UPSC Syllabus and Indian Polity and Governance Books from here. Here the aspirants have also facilitated with UPSC Previous Year’s Question Papers and other IAS Study Materials.

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Atal Pension Yojana UPSC Questions

Question – Regarding Atal Pension Yojana, which of the following statements is/are correct? (UPSC 2016)

1. It is a minimum guaranteed pension scheme mainly targeted at unorganized sector workers.
2. Only one member of a family can join the scheme.
3. Some amount of pension is guaranteed for the spouse for life after the subscriber’s death.

Select the correct answer using the code given below:

1. 1 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3

Answer – C

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