Everything You Must Know About Family Pension

When the sole earning member of a family passes away, the financial burden can weigh heavy on the family members. However, government employees receive financial protection with a family pension.

Here is all you need to know about the scheme, and more importantly, how it can help you out. 

What is a family pension?

A family pension scheme offers a pension to the wife after the death of husband during the service period as a government employee. Or vice versa in case the wife was the breadwinner of the family. Besides spouses, any surviving family member like the children of the deceased can avail of family pension after the death of the pensioner.

However, to avail the family pension scheme, all family members must satisfy some age and earning criteria. So, let’s understand eligibility criteria for each government-sponsored family pension scheme.

Central Government Family Pension

The central government’s employee family pension scheme allows a pensioner to decide who can avail family pension after their demise. Here are the eligibility criteria for the same.

• Eligibility for spouse

A pension to the wife after the death of the husband is paid till their death or remarriage, whichever is earlier. However, a childless widow will continue receiving pension on remarriage if her income is less than the minimum family pension amount.

• Eligibility for children

Family pension for children based on age

Children can claim pension based on their date of birth. To do that, the younger child will not be eligible until the elder child becomes ineligible for the pension scheme, while twins can claim the pension equally.

Family pension for children based on marital status

1. Family pension to unmarried son

For an unmarried son, the scheme is applicable till he turns 25 or gets married, or starts earning, whichever is earlier. The adopted child of the pensioner’s spouse will not be eligible for the pension facility.

2. Family pension to unmarried daughter

Family pension to unmarried daughter or widowed daughter is payable until she turns 25, till she re-marriages or starts earning monthly income above Rs. 9000, whichever is earlier.

 3. Family pension for disabled son

If the deceased pensioner’s son is physically disabled and cannot earn a living, he is entitled to the family pension after the death of a pensioner for lifetime.

National Pension System (NPS)

People employed in government and private companies can apply for the family pension in case of death of an NPS employee. National Pension Scheme is a retirement saving scheme, which doubles up as a family pension scheme after the death of the employee. 

Family pension in case of death of an NPS employee before the maturity shall be paid to the nominee or the legal heir of the subscriber. If the employee dies after the pension matures, the earned annuity is given to the nominee in the form of  NPS Family pension.

Like other pension options, a pension to the wife after the death of husband is applicable if she is the nominee for the scheme. That said, family pension in case of death of an NPS employee is only available to the nominee assigned by the pensioner. If the said nominee passes away, the annuity cannot be transferred to another person.

Railway Family Pension

Family members of the railway employee get the benefits of the pension scheme in case of the death of a working or retired employee. There are two major grant categories of the scheme.

Category 1

1. Pension to wife after death of husband is payable till remarriage or death.
2. Family pension after death of a pensioner applies to son or daughter till they attain the age of 25 years or start earning or get married, whichever is earlier.

Category 2

1. Family pension after the death of a pensioner is granted to parents who are wholly dependent on the employee if there is no widow or child left behind.
2. Dependent disabled siblings are also eligible for family pension.

How to avail of pension after the pensioner’s demise?

Below is a step-by-step guide on how family members can claim a pension after an employee's demise.

1. To avail family pension after death of husband, wife needs to approach the pensioner's bank with a death certificate and the pensioner's half of the pension payment order.
2. She will then be guided by the bank branch manager for further procedures.
3. If the pensioner has a joint account with their spouse, they need to activate the pension plan by submitting a death certificate. However, if the pensioner does not have a bank account, you need to open an account.
4. Next, the bank will verify a family member's identity by accepting their identity proof along with a photograph.
5. The bank will activate the pension plan by updating the death date, and half of the pensioner's PPO (Pension Payment Order) will be given to the spouse.
6. Once you complete all the formalities, the bank will credit the family pension amount to the family member's account.

To conclude, a family pension after the death of a husband or any other earning member of the family can offer financial stability to the pensioner’s family. However, if you need more funds than the pension allows, a loan from Tata Capital can also help. 

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