PMSYM stands for Pradhan Mantri Shram Yogi Mandhan. This is a social initiative by the Ministry of Labour and Employment of the Government of India. Prime Minister Narender Modi launched this scheme in February 2019. This article will discuss Pradhan Mantri Shram Yogi Mandhan along with its features, benefits, eligibility, and how to enrol for PMSYM.
What is PMSYM Pradhan Mantri Shram Yogi Mandhan?
Pradhan Mantri Shram Yogi Mandhan (PMSYM) is a contributory and voluntary pension scheme for the unorganised sector. It was introduced in Budget 2019. Under this scheme, the subscribers will get a minimum pension of Rs. 3000 per month after 60 years. However, the subscribers have to make contributions in the range of Rs. 55 to Rs. 200 per month till 60 years.
In addition, this is one of the largest pension schemes launched by the Government of India. This scheme is for the labour class who fall in the age group 18 years to 40years. Also, this scheme offers a regular pension after 60 years. Therefore, this scheme provides old age protection and social security for unorganised workers (UW).
The PM Shram Yogi Yojana is administered by the Ministry of Labour and Employment and will be a Central Sector Scheme. The implementation will be through Common Services Centres (CSC) and the Life Insurance Corporation of India. Also, LIC handles the payout of the pension.
Features of Pradhan Mantri Shram Yogi Mandhan
The following are the key features of PM Shram Yogi Yojana
This scheme was launched in Budget 2019 by Prime Minister Narender Modi. It came into effect on 15th February 2020. This scheme aims to provide benefits to the unorganised sector people. They are primarily engaged in street vendors, rickshaw pullers, head loaders, domestic workers, washermen, agricultural workers, construction workers, beedi workers, handloom workers, leather workers, cobblers, or other similar occupations.
The investment amount that one can deposit towards this plan is in the range of Rs. 55 to Rs. 200. The subscriber and the central government make the contribution towards this scheme on a 50:50 basis. Hence, this amount will be auto-debited from their bank account or Jan Dhan account of the subscriber.
The subscriber’s age should be between 18 and 40 years (Above 40 years is not eligible). Furthermore, once the individual joins the scheme, they have to contribute until 60 years.
The minimum pension that one will receive is Rs.3000. The pension will start on attaining the age of 60 years.
This pension scheme is available to workers whose income is below Rs.15000 per month.
Demise of Beneficiary
The spouse will receive 50% of the pension as a family pension in case of the subscriber’s death. The family pension is only applicable to spouses and not to children.
The subscriber has an option to exit the scheme prematurely. This is due to the inconsistent nature of work of unorganised sector people. Therefore, if the subscriber exits the plan prematurely, within ten years, then the subscriber’s contribution along with the interest rate from the savings account will be paid.
Suppose the subscriber exits the scheme after ten years but before attaining 60 years. In that case, the beneficiary’s contribution along with the interest or interest from the savings bank account, whichever is higher, will be paid.
Investment in this scheme does not provide any loans against the PMSYM account.
The beneficiary can add the nominee while registering under this plan.
Check out: Best Fixed Deposit Rates
Benefits of Pradhan Mantri Shram Yogi Maandhan
The following are the benefits that an individual can avail of from this voluntary and contributory scheme.
The individuals who are a part of this scheme are entitled to receive a minimum pension amount of Rs.3000 per month once they complete 60 years.
During the receipt of the pension, if the subscriber dies, the spouse is entitled to receive only 50% of the pension amount. Therefore, only the subscriber’s spouse is eligible for family pension and not any other family member.
Suppose the eligible subscriber has given regular contributions and becomes permanently disabled due to any cause before attaining 60 years of age and unable to contribute. In such a case, the spouse is entitled to continue with the scheme by paying regular contributions as applicable. Also, the spouse can exit the scheme by receiving the share of the amount deposited by the subscriber. The spouse will receive the contributions along with interest as earned by the pension fund or the interest at the savings bank rate, whichever is higher.
On Early Withdrawal
If the subscriber exits the scheme within ten years, then the subscriber’s contribution along with the interest rate from the savings account will be paid.
Suppose the subscriber exits the scheme after completing ten years or more but before attaining 60 years. In that case, the beneficiary’s contribution along with interest or the interest from the savings bank account, whichever is higher, is paid.
If the subscriber has given regular contributions and dies due to any cause, the spouse is entitled to continue subsequently by paying regular contributions as applicable. Also, the spouse can exit the scheme by receiving the share of the contribution deposited by the subscriber. The spouse will receive the contributions along with interest as earned by the pension fund or the interest at the savings bank rate, whichever is higher.
In case of the death of the subscriber and the spouse, the corpus shall be credited back to the pension fund.
Look for: Best Mutual Funds to Invest
Eligibility for PMSYM
This yojana is meant for any person belonging to the unorganised sector. In this sector, the wages are not fixed due to the nature of work people are involved in. The wages of these workers depend on the work they do daily. In other words, they do not have a fixed income to earn a living. Therefore, the following are the conditions to be met to be eligible for this PM Shram Yogi Yojana-
- The individual should be an unorganised sector worker
- Entry age is between 18 and 40 years
- Workers monthly income should be Rs.15,000 or below.
Should not be –
- Any individual engaged in organised sector i.e. a member of EPFO/NPS/ESIC.
- An individual who is an income taxpayer
Individual Should possess
- Aadhaar Card and active mobile number
- Savings bank account/ Jan Dhan bank account with IFSC
Look out for : Senior Citizen Savings Schemes
How to Enroll for PMSYM?
Firstly, eligible and interested people can enrol for the PMSYM scheme by visiting the nearest Common Service Centres (CSC). One can check for the nearest CSC from the information page on the websites of LIC, Ministry of Labour and Employment. The following are documents that one requires for enrollment –
- Aadhaar card
- A savings account or Jan Dhan account details along with IFSC code ( along with a copy of bank passbook or bank statement or cancelled cheque)
- An active mobile number for OTP verification
- Initial contribution in cash for opening an account under this scheme
The following are the next steps for enrollment –
- The Village Level Entrepreneur (VLE) at the CSC will enter the Aadhaar number, subscriber’s name and date of birth as printed on the Aadhaar card for authentication. The UIDAI database will verify the same through the demographic authorization.
- The VLE will complete the online registration by entering the bank account details, mobile number, email address, spouse and nominee details. Hence, self-certification of eligibility conditions are completed.
- Post this, the system will automatically calculate the contribution per month according to the age of the candidate.
- The candidate has to pay the initial subscription amount in cash to the VLE.
- Enrolment cum auto-debit mandate form will be generated by the system and signed by the subscriber. The VLE will scan the same and upload it to the system.
- Finally, the system will generate a unique Shram Yogi Pension Account Number (SPAN). The system will print the Shram Yogi card and hand it over to the subscriber.
To sum up, people falling under unorganised sector depend on their daily wages to run their household. Thus, when they become old, it becomes difficult to work and earn. Also, they don’t have a pension or savings on which they can rely. Therefore, to overcome this problem, the central government of India has come up with this valuable scheme to help the labour class people. Investment in this yojana will help them even if they are not in the condition to work anymore.