Pension Hike Update: What Is the New Wage Ceiling and How Much Will Your Pension Increase?

Pension Hike Update: In today’s times, every working person is worried about their retirement. In such a situation, pension becomes the only support for old age, but in the face of rising inflation, it is impossible to survive on the pension received. Consequently, unions raise their voices every year for a pension increase, but often come up empty-handed. This year, the Employees ‘ Pension Scheme 1995 (EPS-95) is once again in the news. 

Labor unions and pensioners’ organizations have demanded that the government increase the minimum pension from 1,000 to 9,000. As the pensioners’ organizations’ demands intensified, the issue has reached Parliament . Recently, Parliament discussed the minimum pension. Let’s find out what the government’s opinion is on the demand for a pension increase.

How much pension do you get now?

Under the EPS-95 scheme, employees receive a pension after retirement. The minimum pension is set at Rs 1,000 and the maximum at Rs 7,500. However, due to rising inflation, the minimum pension of Rs 1,000 is extremely low. Therefore, pensioners are demanding an increase in the minimum pension from Rs 1,000 to Rs 9,000. People believe that increasing the pension amount will make life easier.

Government’s stand on increasing the minimum pension to Rs 9,000

This issue of increasing the minimum pension to Rs 9,000 was recently raised in the Lok Sabha. Responding to this, Minister of State for Labour and Employment, Shobha Karandlaje, said that we have received applications from train unions and public representatives, in which a demand has been made to increase the existing amount of Rs 1,000 per month. However, the government has not clarified when this demand will be met. The minister further said that EPS-95 is a pension scheme in which money is deposited on the basis of a fixed percentage of the employee’s salary and pension is given accordingly.

The company contributes 8.33% of the salary to this fund , while the central government adds 1.16%, up to a maximum of Rs 15,000. Furthermore, the government provides budgetary support to ensure that every employee receives a minimum pension of Rs 1,000 per month. The current situation is that there are over 4.7 million active pensioners across the country who receive a monthly pension of less than Rs 9,000.

In such a situation, suddenly increasing the pension from Rs 1,000 to Rs 9,000 is not easy. One reason for this is that this would be an increase of almost nine times the current pension. If the pension is increased this much, the fund will face significant expenditure, making future payments difficult. Given these statements made by the government, achieving a minimum pension of Rs 9,000 seems unlikely.

Following the response of Minister of State for Employment Shobha Karandlaje in the Lok Sabha, there remains hope for relief for pensioners . At the beginning of 2026, the Supreme Court directed the central government to review the EPFO’s current wage ceiling of Rs 15,000 within four months. If an increase is needed after the review, that should also be considered. Let’s first explain what the wage ceiling is and how much pensions will increase with its increase.

What is wage ceiling?

The wage ceiling refers to the maximum salary limit against which pensions are determined. In EPS-95, this limit was long set at Rs 6,500, but was later raised to Rs 15,000. This ceiling is now being considered for further increase. If this increase occurs, pensions will also increase.