EPS minimum pension of Rs 7,500: Here’s what the government told Parliament

Replying to a question in the Lok Sabha on July 20, 2026, the Ministry of Labour and Employment said it has received representations from various stakeholders, including trade unions and public representatives, seeking an increase in the minimum pension under EPS from the existing Rs 1,000 per month.

However, the government did not announce any decision to raise the minimum pension. Instead, it reiterated that any decision has to balance social security needs with the long-term sustainability of the pension fund.

What was asked in Parliament?

Lok Sabha MP Bhausaheb Rajaram Wakchaure asked the government whether the demand made by the EPS-95 National Agitation Committee for a minimum pension of Rs 7,500 per month along with DA has been pending for a long time.

The MP also sought to know:

Whether the government considers the existing pension of around Rs 1,000-2,000 per month inadequate for a dignified life.

What action has been taken on recommendations of expert committees.

Whether the government is considering budgetary support or restructuring of the pension fund.

By when a final decision is likely to be taken.

What did the government say?

Responding on behalf of the Ministry of Labour and Employment, Minister of State Shobha Karandlaje said: “Representations have been received from various stakeholders including trade unions and public representatives to increase the minimum pension under the Employees’ Pension Scheme (EPS), 1995 from the existing Rs. 1,000/- per month.”

The reply, however, stopped short of announcing any proposal to increase the minimum pension.

Instead, the government explained that the Employees’ Pension Scheme is a defined contribution-defined benefit social security scheme, where pension benefits depend on contributions made to the pension fund and the financial health of the fund.

Government explains how the EPS fund is financed

The ministry said the Employees’ Pension Fund is built through two major sources:

Employer’s contribution of 8.33% of wages.

Central government’s contribution of 1.16% of wages, subject to a wage ceiling of Rs 15,000 per month.

According to the government, all pension benefits under the scheme are paid from these accumulated funds.

The ministry also pointed out that the pension fund is valued every year as required under Paragraph 32 of the Employees’ Pension Scheme to assess its financial position and future liabilities.

Government highlights existing budgetary support

The government also underlined that it already provides budgetary support for the minimum pension.

“The Government is providing a minimum pension of Rs.1,000 per month to pensioners under the EPS, 1995 through budgetary support, which is in addition to the budgetary support of 1.16 per cent of wages provided annually towards EPS to Employees’ Provident Fund Organisation (EPFO),” the reply said.

Sustainability of the fund remains the key concern

While responding to the demand for a higher pension, the government said it remains committed to providing social security to EPFO members but must also protect the long-term financial health of the pension fund.

“The Government is committed to ensuring robust social security coverage to members of EPFO schemes while taking into consideration the sustainability of the Fund and the future liabilities thereon,” the ministry said.

The reply did not specify any timeline for increasing the minimum pension or indicate that a proposal is under active consideration.

Why are pensioners demanding Rs 7,500 pension?

The demand for a higher minimum pension has been raised for several years by the EPS-95 National Agitation Committee and various trade unions.

Their main argument is that the existing minimum pension of Rs 1,000 per month is too low to meet even basic household expenses.

The pensioners have been demanding:

A minimum monthly pension of Rs 7,500.

Dearness Allowance linked to inflation.

Better medical benefits for retired workers.

They argue that rising prices over the past decade have significantly reduced the purchasing power of pensioners receiving Rs 1,000 or Rs 2,000 a month.

When was the minimum EPS pension last revised?

The minimum pension under EPS was fixed at Rs 1,000 per month with effect from September 1, 2014.

Since then, there has been no revision in the minimum pension amount despite repeated representations from pensioners’ associations, trade unions and Members of Parliament.

Over the years, several parliamentary questions have raised the issue, but successive government replies have maintained that any increase has to be examined keeping in view the financial sustainability of the pension fund.

How does the EPF and EPS contribution work?

Every month, employees covered under EPFO contribute 12% of their basic salary plus dearness allowance towards the Employees’ Provident Fund (EPF).

The employer also contributes 12%.

However, the employer’s contribution is split.

8.33% of wages, subject to the wage ceiling of Rs 15,000 a month, goes to the Employees’ Pension Scheme (EPS).

The remaining employer contribution goes to the EPF account.

In addition, the Central Government contributes 1.16% of wages, subject to the wage ceiling, to the pension fund.

Because the pension is paid from a common pool created through these contributions, any increase in pension benefits generally requires either higher contributions from employees or employers, additional budgetary support from the government, changes in the scheme’s structure, or a combination of these measures.

What about higher EPS pension?

It is important to distinguish the demand for a higher minimum pension from the higher pension option available under EPFO.

Following the Supreme Court’s November 2022 judgment, eligible EPFO members who contributed on salaries higher than the statutory wage ceiling were allowed to opt for a higher pension by diverting a larger share of their provident fund contributions to the pension scheme.

This option is meant for eligible subscribers who made contributions on higher wages and is separate from the demand to increase the minimum pension payable to all EPS pensioners.

What happens next?

For now, the government’s latest reply indicates that the demand for a minimum pension of Rs 7,500 has been acknowledged, but no decision has been taken.

The Centre continues to emphasise that while expanding social security remains a priority, any enhancement in pension benefits must also ensure that the Employees’ Pension Fund remains financially sustainable over the long term.

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