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Unkind cut in pension scheme: nothing for dependants -Basant Kumar Mohanty

-The Telegraph

Centre to eat up savings in case of death of subscriber and spouse

The Centre will swallow the contribution of unorganised workers under a new pension scheme in the event of the death of the subscriber and his or her spouse, according to an official notification.

Contributory pension schemes usually ensure payments to dependant and unmarried children.

However, the notification for the Pradhan Mantri Shram Yogi Maan-dhan, announced in the interim Union budget earlier this month, says: “After death of subscriber and his or her spouse, the corpus shall be credited back to the fund.”

Economist Jean Dreze said that in contributory pension schemes, the subscriber’s dependants should get back the money in case of death of the subscriber and his spouse. “The poor subscriber contributes money by cutting his expenses. The government should not eat up that contribution in case of death of both parents,” Dreze said.

Subscribers to the scheme have been promised a pension of Rs 3,000 a month after they turn 60. Although the interim budget said individuals aged between 18 and 29 and earning below Rs 15,000 a month would be eligible, the notification puts the cut-off age at 40.

Depending on the age, the monthly contribution will go up. A subscriber aged 18 needs to contribute Rs 55 a month, which goes up to Rs 100 for a 29-year-old person and touches Rs 200 for the cut-off age of 40. The monthly contributions have to be paid till the subscriber turns 60.

The scheme is meant for individuals engaged as home-based workers, street vendors, midday meal workers, cobblers, ragpickers, rickshaw-pullers and construction workers, among others. Kindly click here to access the Gazette notification issued by the Ministry of Labour and Employment dated 7th February, 2019.
 
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