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What is Family Pension?

In India, the family of a government employee or retiree who has passed away receives a family pension. Continue reading to learn more about this benefit.

  • 2,326 Views | Updated on: Jan 12, 2024

Key takeaways

  • Family Pension serves as a source of financial support for the surviving spouse, and dependent children.
  • The pension entitlement for government employees is determined based on their emoluments during their service.
  • The minimum family pension amount guaranteed is ₹9,000, while the maximum limit is capped at 50% of the highest government pay in India.
  • Knowing that there is a steady income source in place can provide peace of mind to the family during a difficult period.

Family is the cornerstone of human society, and ensuring the well-being of family members is a fundamental concern for everyone. In this pursuit, various financial instruments and schemes are available to provide financial security to dependents even after the primary breadwinner’s demise. One such essential scheme is the Family Pension.

What is Family Pension?

Family pension, also known as survivor’s pension, is a financial benefit provided to the immediate family members of a deceased government employee. It serves as a source of financial support for the surviving spouse, dependent children, and, in some cases, dependent parents or siblings.

How Does Family Pension Work?

The pension entitlement for government employees is determined based on their emoluments during their service. Emoluments refer to the employee’s basic pay. When there are fluctuations in emoluments, the average of the basic pay received in the final 10 months of service is computed. The pension amount is then set at 50% of either the basic pay or the average basic pay, whichever is more advantageous.

The minimum family pension amount guaranteed is ₹9,000, while the maximum limit is capped at 50% of the highest government pay in India. Pension payments continue until the recipient’s passing.

Significance of Family Pension

Now that you know what a family pension is, it is time to move ahead and understand some of the key aspects of its significance:

Standard of Living

Family pension helps maintain the family’s standard of living, preventing a sudden drop in income and allowing the surviving members to continue their usual routines and expenses.

Reducing Dependency on Welfare

Without family pensions, many surviving family members might have to rely heavily on social welfare programs, which can strain government resources. Family pension schemes reduce this dependency.

Peace of Mind

Knowing that there is a steady income source in place, can provide peace of mind to the family during a difficult period. This financial support can also alleviate emotional stress.

Conclusion

A family pension is a vital financial support mechanism designed to safeguard the interests and well-being of the immediate family members of a deceased employee or pensioner. It offers a lifeline during a time of emotional turmoil and helps maintain financial stability.
Understanding the significance of family pensions and how they work is essential for individuals considering a career in government service or an organized sector where such schemes are prevalent. It reinforces the value of long-term financial planning and the importance of providing for one’s loved ones even after one’s demise.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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