The perks and bonuses2 of a government job make it an attractive career option to many individuals. Job security, retirement benefits, handsome salary, etc., are some advantages of being a government employee. Moreover, government jobs give the benefit of a family pension. The provision ensures the financial security of your loved ones, so you can live stress-free without worrying about the future of your children or spouse after you.
Read and know more about family pension details and the new family pension rules of the Department of Pension and Pensioners’ Welfare.
What is a Family Pension?
A pension is a monthly payment to retired government employees during their lifetime. On the other hand, a family pension is a pension given to the government employee’s family after their in-service demise. The government also provides a family pension if the deceased employee is retired and has received a pension or compassionate allowance at the time of death.
Who is Eligible to Receive a Family Pension?
According to the Government rules up to 2004, a family pension is provided to the widow/widower of the deceased employee until remarriage or death. If there is no widow/widower of the deceased employee, it is given to the dependent children of the employee who are less than 25 years of age.
Now that the family pension meaning is clear, here are some of its rules.
Family Pension Rules
According to the pension rules, the family pension is 30% of the basic salary of the government employee. But it cannot be less than ₹3500 per month.
A family pension is paid to a childless widow even after her remarriage if her income is less than the family pension amount.
The benefit of a family pension is granted to the children according to their birth. This implies that the youngest is not eligible until the older siblings become ineligible to receive the benefit. If the deceased employee has twin children, the family pension amount is distributed equally to both.
Family pension to an unmarried son is given up to the age of 25 years or until his marriage or he starts earning.
An adopted child by the deceased employee’s spouse is not eligible for the family pension benefit.
According to the widow daughter pension rules, widowed daughters of the deceased employee are also eligible until their remarriage.
Moreover, in the enhanced family pension rules, the employee’s dependent parents and divorced/unmarried daughters are eligible for the pension benefit. The parents are eligible until their death, while the unmarried daughters are eligible until their marriage.
In case the deceased employee was legally separated from their spouse but had children, the ex-spouse is eligible to receive the family pension if the children deny their eligibility for the benefit.
The deceased pensioner’s physically or mentally disabled son or daughter is eligible for receiving a family pension throughout their lifetime. They are granted the pension amount through a legal guardian. But the daughter becomes ineligible upon marriage.
Under the new family pension rules, a posthumous child is also eligible for a family pension. Moreover, a child born from a void marriage can also receive the pension benefit.
What are Commuted and Uncommuted Pensions?
When the family pension is received monthly by the family of the deceased government employee, it is called an uncommuted pension. But, if the family member wishes to receive the family pension in a lump sum amount, it is known as commuted pension. Availing of the family pension in a lump sum manner provides tax benefits that are discussed below.
Family Pension Taxability
How to Avail Family Pension Benefits?
The Department of Pension and Pensioners’ Welfare has laid down rules about the release of family pensions after the pensioner’s demise. To claim the family pension, you need to take the following steps:
Usually, the family pension of the government employee is sanctioned for the spouse at the time of authorisation. However, the Pension Payment Order mentions the family pension that could be drawn after the pensioner’s demise. In this case, the deceased employee’s family has to apply Form 14 along with the death certificate of the pensioner.
If the pensioner has a joint account with the spouse, submission of the death certificate and application activates the pension account. But if the pensioner has no account, you need to open an account first.
Other documents required for the family verification are an Aadhar card, Pan Card and a joint photograph.
If the employee passes away during the service tenure, the widow/widower or children of the employee have to fill out Form 14. The form is submitted at the head office, which sanctions the family pension through the Pay and Accounts Officer.
Now you know about the immense benefits of a pension plan and how it works. But not everyone works as a government employee. So, you must start investing in a retirement plan to ensure regular income when you are no longer working.
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