Atal Pension Yojana: How to avail of pension scheme for unorganised sector

Amount subscribers get on retirement is determined on how early they joined the scheme and the contribution amount

Finance Minister Nirmala Sitharaman and Congress leader Jairam Ramesh got into an argument after the Opposition politician said the government’s Atal Pension Yojana (APY) was “poorly designed”.

The pension scheme, named after former prime minister Atal Bihari Vajpayee, provides social security for workers in the unorganised sector. In response to Ramesh’s post on X (formerly Twitter), Sitharaman said the Congress leader “is known for using verbal sophistry to hide facts, is being malicious or is ignorant of the basic tenets of designing a good pension scheme”.

Here is how Atal Pension Yojana works.

Atal Pension Yojana, introduced in Union Budget 2015-16, provides pension to the unorganised sector of the society such as the domestic helps, gardeners, delivery boys and others. Employees of an organisation that does not provide them pension benefits can also apply for the scheme.

Administered by the Pension Fund Regulatory and Development Authority through the National Pension System, APY is open to all citizens of India aged between 18 and 40.

Contributors can get a fixed pension of Rs 1000, Rs 2000, Rs 3000, Rs 4000, or Rs 5000 on attaining an age of 60. The amount recieved is determined on a subscriber’s age and the contribution amount. A contributor’s spouse can claim pension upon their death, and upon the death of both the contributor and his/her spouse, the nominee will receive the accumulated corpus. However, if the contributor dies before completing 60 years of age, the spouse can either exit the scheme and claim the corpus or continue the scheme for the balance period.

To be eligible for the ATAL PENSION YOJANA, workers must adhere to the following criteria:

Must be an Indian citizen.

Atal Pension Yojana subscribers must not be a member of any statutory social security scheme.

Must be aged between 18 and 40.

Must have a savings bank account.

Must have a valid mobile number.

Atal Pension Yojana account or the subscriber's bank savings account must be linked with the Aadhar card.

To apply for the Atal Pension Yojana and avail of its benefits, follow these steps:

You can visit any bank to start your Atal Pension Yojana account.

Forms are available online and at all banks.

Fill out the application form with the required details.

Submit the completed application form to your bank.

Ensure you provide a valid mobile number.

Submit a photocopy of your Aadhaar card along with the application form.

Contributions to the Atal Pension Yojana (APY) are collected via auto-debit from the subscriber's savings bank account. The debit occurs on a specific date each month for monthly contributions, the first month of the quarter for quarterly contributions, or the first month of the half-year for half-yearly contributions.

If you default on your payments, your bank will collect some additional amounts as follows: 

Re 1 per month for contributions up to Rs 100 per month.

Re 2 per month for contributions ranging from Rs 101 to Rs 500 per month.

Re 5 per month for contributions between Rs 501 to Rs 1000 per month.

Rs 10 per month for contributions beyond Rs 1001 per month.

If a person joins Atal Pension Yojana at 18, he will have to invest Rs 210 every month. After your retirement, you will receive a monthly pension of Rs 5000 every month from 60.
The following table mentions how much you need to contribute per annum based on your age and pension plan.