Imagine working all your life in a factory, shop, or office, only to get only ₹1,000 per month as pension. This amount is not enough even for groceries in today’s time. For many private sector workers, this was the reality. But in May 2025, the Supreme Court changed this. It ordered that the pension under EPS-95 must be at least ₹7,500 per month. This decision gives new hope to more than 78 lakh retirees in India.
What is EPS-95?
EPS-95 means Employees’ Pension Scheme 1995. It was started by EPFO (Employees’ Provident Fund Organisation) to give retirement money to workers in the organised sector.
In this scheme, 8.33% of the employer’s share of provident fund goes into the pension fund. The maximum salary counted is ₹15,000 per month. The government also adds 1.16% extra to support the scheme.
To get pension, a worker must have at least 10 years of service. The scheme also provides pensions to widows and orphans. But the minimum pension was only ₹1,000 per month, which was very low. Because of this, workers and unions protested for many years.
Supreme Court’s Decision
In May 2025, the Supreme Court gave a big judgment in favour of EPS-95 pensioners. The Court said ₹1,000 pension is too low and unfair. It ordered the increase to ₹7,500 from June 2025.
The Court also said that Dearness Allowance (DA) must be added. DA will be calculated twice every year, in January and July, based on the price index, just like central government employees. Pensioners do not need to apply again. The new pension will be given automatically by EPFO.
This step will help pensioners fight rising prices, which go up 5-6% every year.
Who Will Benefit
All EPS-95 pensioners will get the higher amount. This includes factory workers, clerks, and other employees. Urban pensioners will benefit more because of high living costs like rent and medical bills.
For example, a senior in Mumbai said the new pension helps him buy medicines without asking money from his children. Widows will also see higher pensions, as they normally get half of their husband’s pension. Families will have more money to spend on daily needs, which will help the local economy too.
But some experts worry about the cost. The government will have to pay thousands of crores more every year. Still, the decision is seen as necessary for the dignity of workers.
New Pension System
After the judgment, EPFO quickly updated the system. The money is now sent directly into pensioners’ bank accounts through digital transfers. By September 2025, 90% of pensioners had already received the new pension.
There are still some small technical issues, but EPFO is fixing them. The pension is taxable as per income slabs, but people above 60 years get tax relief up to ₹3 lakh.
There are also talks to raise the pension further to ₹8,500 by the end of 2025, if the finances allow. Workers can also add extra voluntary contributions for higher pension.
Comparison Before and After
| Aspect | Before Increase (2024) | After Increase (June 2025) |
| Minimum Pension | ₹1,000/month | ₹7,500/month + DA |
| DA Adjustment | Not given | Twice yearly (Jan/Jul) |
| Beneficiaries | 7.8 million | Same, auto-updated |
| Government Cost | ₹1,000 crore approx. | ₹7,000 crore approx. |
| Eligibility | 10+ years service | Unchanged |
A Better Future for Pensioners
The increase in EPS-95 pension is a big step for social justice in India. It gives respect and support to people who worked for decades. Retirees must also update their KYC details on EPFO portals to get pensions without delay.
With this change and the upcoming 8th Pay Commission, 2025 could become a historic year for retirement benefits in India. The new pension system shows that every worker’s contribution is valued.
Disclaimer: This article is for information purposes only. Please check official EPFO notifications and government updates for the latest rules and details.