Atal Pension Yojana (APY), launched on May 9, 2015, is a government-backed social security scheme for workers in the unorganised sector. It provides a fixed monthly pension of Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000, and Rs 5,000 as per the subscriber’s choice at retirement or upon turning 60. For example, if the subscriber is 18-year-old and want a monthly pension of Rs 1,000 or Rs 5,000 at retirement, they will need to contribute Rs 42 and Rs 210, respectively.

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Who Can Open An APY Account?

Indian citizens aged 18-40 can open the account with banks and designated post offices provided they have savings bank accounts to auto-debit their APY contributions.

So, for those who joined the APY scheme between June 1, 2015, and March 31, 2016, the government co-contributed to the account from 2015-16 to 2019-20, provided the subscribers were not covered by any statutory social security scheme and were not income taxpayers. However, post-March 31, 2016, the government stopped its contributions towards the scheme.

As per the NPS trust, from October 1, 2022 onwards, an income taxpayer is ineligible for the scheme. Anyone who has opened an APY account after this date and is found out to have been paying tax on or before the date of application will also be ineligible. In that case, the APY account will be closed and the accumulated funds will be returned to the subscribers.

The pension starts upon reaching 60. However, in case of an emergency, the subscriber can withdraw the funds before maturity and exit from the scheme.

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When Can You Exit And How Much Refund Will You Receive?

Voluntary Exit: A subscriber can voluntarily exit from the scheme during a medical emergency. The Fund Regulatory & Development Authority, (Exit & Withdrawal under National Pension System Trust) regulations 2015, has issued a list of specified illnesses applicable for premature withdrawal or exit from the scheme. These diseases include cancer, kidney failure, primary pulmonary arterial hypertension, major organ transplants, multiple sclerosis, total blindness, etc. In the case of a voluntary exit, the refund amount will include the subscriber’s contribution and the accrued interest after deducting the maintenance charges. If the government was a co-contributor, the withdrawal amount will include only the contribution made by the subscriber (including accrued interest minus the charges).

On Death: In the case of subscriber’s death, the spouse can claim the accumulated fund and close the account. If the subscriber is unmarried, divorced, or the spouse passed away, the fund is settled in the name of the subscriber’s nominee. Further, if the spouse wants to continue the account, it will be maintained in their name, and they must contribute to it until they turn 60.