Pension Scheme for Workers in Informal Sector

Prelims level : Economy Mains level : Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes
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  • According to Labour Ministry notification, All unorganised sector workers up to 40 years of age can subscribe to the Pradhan Mantri Shram Yogi Maandhan (PMSYM) scheme, which entails a minimum monthly pension of Rs 3,000.


  • The monthly contribution by the worker joining the scheme would be Rs 55, with matching contributions from the government. The contributions would rise at higher age. The worker joining the scheme at the age of 40 years would contribute Rs 200, while workers at the age of 29 years would pay Rs 100.
  • 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.
  • However, informal workers will not be eligible for the scheme if they are covered under the National Pension Scheme, the Employees’ State Insurance Corporation Scheme or Employees’ Provident Fund Scheme. Workers who are income-tax assessees are also not be eligible.
  • The scheme has been brought under the Unorganised Workers’ Social Security Act, 2008. The Central government will establish a pension fund to be administered for this scheme.
  • 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.
  • 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.
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