<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
Here is all you need to know about the scheme, and more importantly, how it can help you out. <\/p>\n\n\n\n
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.<\/p>\n\n\n\n
However, to avail the family pension scheme, all family members must satisfy some age and earning criteria. So, let\u2019s understand eligibility criteria for each government-sponsored family pension scheme.<\/p>\n\n\n\n
You can receive a family pension in two forms:<\/p>\n\n\n\n
Commuted pension:<\/strong> This provides a lump sum payment, offering immediate financial support. This lump sum is generally not taxable.<\/p>\n\n\n\n Uncommuted pension:<\/strong> This offers a regular monthly income, providing a stable financial stream. You can enjoy tax exemption on up to \u20b915,000 or 1\/3rd of the pension amount, whichever is lower.<\/p>\n\n\n\n The central government\u2019s 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.<\/p>\n\n\n\n The Family Pension Rules for central government employees are defined under the Central Civil Services (Pension) Rules. According to these rules, the family pension is calculated at a uniform rate of 30% of the last basic pay drawn by the employee. The pension amount is subject to a minimum of Rs. 3500 per month and a maximum of 30% of the highest government salary.<\/p>\n\n\n\n It’s important to assess your risk tolerance based on age, income sources, and significant expenses such as children’s education, loans, and marriage. As retirement nears, focus on leveraging the benefits from your accumulated assets. These can provide either a steady monthly income or a lump-sum amount upon retirement.<\/p>\n\n\n\n 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\u2019s spouse will not be eligible for the pension facility.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n If the deceased pensioner\u2019s son is physically disabled and cannot earn a living, he is entitled to the family pension after the death of a pensioner for lifetime.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n Category 1<\/p>\n\n\n\n Category 2<\/p>\n\n\n\n Once you complete all the formalities, the bank will credit the family pension amount to the family member’s account.<\/p>\n\n\n\n There are two types of pensions: commuted and uncommuted. <\/p>\n\n\n\n A commuted pension is when part of the pension is given as a one-time lump sum, and the rest is paid out in regular monthly payments. An uncommuted pension means the entire pension is received as regular payments over time.<\/p>\n\n\n\n But how are these pensions taxed? Let’s understand. A commuted pension is when part of the pension is given as a one-time lump sum, and the rest is paid out in regular monthly payments. An uncommuted pension means the entire pension is received as regular payments over time.<\/p>\n\n\n\n But how are these pensions taxed? Let’s understand.<\/p>\n\n\n\n – If both gratuity and pension are received, and the entire pension is commuted, one-third of the commuted pension is tax-exempt. The remaining regular payments are taxed as salary.<\/p>\n\n\n\n – If only a pension is received without gratuity and the entire pension is commuted, half of the commuted pension is tax-exempt.<\/p>\n\n\n\n If family members receive a pension after the pension holder\u2019s death, it is considered Income from Other Sources, as it\u2019s not earned from any service rendered by the family members.<\/p>\n\n\n\n Some common differences between pension and family pension are summarised below:<\/p>\n\n\n\n <\/p>\n\n\n\n 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\u2019s family. However, if you need more funds than the pension allows, a loan from Tata Capital can also help. <\/p>\n\n\n\n We offer affordable terms and relaxed eligibility criteria for easy access to quick loans. Check out our offerings here.<\/p>\n\n\n\n <\/p>\n\n\n\nCentral Government Family Pension<\/strong><\/h2>\n\n\n\n
Family Pension Rules For Central Government Employees<\/strong><\/h2>\n\n\n\n
Family Pension for Children Based on Marital Status<\/strong><\/h2>\n\n\n\n
1. Family pension to unmarried son<\/strong><\/h3>\n\n\n\n
2. Family pension to unmarried daughter<\/strong><\/h3>\n\n\n\n
3. Family pension for disabled son<\/strong><\/h3>\n\n\n\n
Railway Family Pension<\/strong><\/h2>\n\n\n\n
\n
\n
How to Avail a Family Pension After the Pensioner’s Demise?<\/strong><\/h2>\n\n\n\n
<\/strong>Below is a step-by-step guide on how family members can claim a pension after an employee’s demise.<\/p>\n\n\n\n\n
Taxability of Family Pension<\/strong><\/h2>\n\n\n\n
1. Commuted pension <\/strong><\/h3>\n\n\n\n
\n
2. Uncommuted pension <\/strong><\/h3>\n\n\n\n
\n
Difference Between Pension And Family Pension<\/strong><\/h2>\n\n\n\n
Factors<\/strong><\/td> Pension<\/strong><\/td> Family Pension<\/strong><\/td><\/tr> Definition<\/strong><\/td> Pension received by an employee post-retirement<\/td> Pension granted to family members after the employee’s demise.<\/td><\/tr> Eligibility<\/strong><\/td> Determined by service tenure and employment policies <\/td> Based on the beneficiary\u2019s relationship, age, marital status, and income<\/td><\/tr> Recipient<\/strong><\/td> Retired employee<\/td> Spouse, dependent children, or dependent parents<\/td><\/tr> Payment type<\/strong><\/td> Provided to the employee for lifetime <\/td> Granted to family members upon the employee\u2019s passing<\/td><\/tr> Taxation<\/strong><\/td> Taxed according to specific income tax rules<\/td> Taxed as “Income from Other Sources” with a standard deduction of up to \u20b925,000.<\/td><\/tr> Pension amount<\/strong><\/td> Depends on the salary and years in service<\/td> According to service rules, its typically 30% to 50%<\/td><\/tr> Unified Pension Scheme<\/strong><\/td> Adjusted for inflation <\/td> 60% of the employee\u2019s last pension before death<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n