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Govt Pension Scheme for Gig Workers: Top 5 Key Updates for 2025

MySmartGrowthTeamFebruary 7, 20253 Mins read14 Views

Govt New Pension Scheme for Gig Workers: Top 5 Key Updates for 2025

Govt Pension Scheme for Gig Workers: Top 5 Key Updates for 2025

The gig economy is booming in India, with millions of workers engaged as delivery partners, cab drivers, freelancers, and more. However, a major challenge these gig workers face is the lack of social security benefits such as pensions, provident funds, and health insurance. Recognizing this gap, the Ministry of Labour and Employment is now working on a pension scheme for gig workers under the Employee Provident Fund Organisation (EPFO). This innovative move could bring significant financial security to gig workers employed by platform aggregators such as Swiggy, Zomato, Uber, Blinkit, and others.

Let us dive into the details of this upcoming scheme and understand how it will impact the gig workforce.

Highlights of the Pension Scheme for Gig Workers

Transaction-Based Contribution Formula:
The pension scheme will follow a transaction-based percentage formula. Under this model, platform aggregators will deduct a specific percentage from each transaction and deposit it into the gig worker’s pension account with the EPFO.
Universal Account Number (UAN) for Every Gig Worker:
Every worker covered under the scheme will receive a Universal Account Number (UAN), ensuring all contributions from different platforms are centralized in one account.
Multi-Platform Compatibility:
If a gig worker is associated with multiple platforms — for instance, earning ₹10,000 from Zomato and ₹12,000 from Rapido — they will receive pension contributions from both platforms. This ensures comprehensive coverage and maximized benefits.
Expected Launch Timeline:
The scheme is likely to be unveiled in the next two to three months, following consultations with state labour ministers, gig workers’ unions, and platform aggregators.

Why is This Pension Scheme a Game-Changer for Gig Workers?

The introduction of a pension scheme is a landmark step for the gig economy. Here is why this initiative is crucial:

Social Security for Gig Workers: Gig workers currently lack access to structured social security benefits such as pension and provident fund. This scheme will help bridge that gap and ensure financial security in their later years.
Universal Coverage Across Platforms: The introduction of UAN simplifies pension contributions for gig workers associated with multiple platforms, making it easy to track and manage their retirement savings.
Increased Financial Inclusion: With the government’s focus on ensuring pension benefits for gig workers, this scheme will promote greater financial inclusion, empowering workers who were previously outside the social security net.
Encouragement for Formalization: The scheme will encourage more gig platforms to formalize their worker relationships, improving working conditions and transparency in the sector.

How Will the Contribution System Work?

The scheme will adopt a transaction-based model where a small percentage of every transaction is contributed toward the worker’s pension account.
Platform aggregators will be responsible for deducting and depositing the pension contribution directly into the EPFO account of the worker.
This ensures a seamless and transparent process for both the workers and the aggregators.

Benefits of the Pension Scheme for Gig Workers

1. Long-Term Financial Security

The biggest benefit of this scheme is that gig workers will now have a dedicated retirement savings plan, ensuring they have a financial safety net in their later years.

2. Simplified Multi-Platform Coverage

The UAN will help gig workers consolidate their contributions from multiple platforms into one account, making it easier to track their savings and benefits.

3. Boost in Social Security Awareness

Many gig workers are unaware of social security benefits. This scheme will create awareness and encourage workers to participate actively in securing their financial future.

4. Low Contribution Burden for Aggregators

Since the contribution will likely be a low single-digit percentage of each transaction, it will not be a significant financial burden for platform aggregators.

Challenges and Considerations

While the scheme is a welcome move, there are some potential challenges that need to be addressed:

Implementation and Tracking: Ensuring seamless implementation and tracking of contributions across multiple platforms can be complex. The government will need to establish a robust infrastructure to manage this.
Compliance from Aggregators : Platform aggregators must comply with the scheme’s guidelines and ensure timely deposits. Any delay or failure could affect the financial security of gig workers.
Awareness Among Gig Workers : The government and aggregators must run awareness campaigns to educate gig workers about the benefits of the scheme and how to access their contributions.

Impact on Platform Aggregators

Platform aggregators such as Swiggy, Zomato, Uber, and others will play a crucial role in the success of this scheme. They will need to:

Integrate the pension contribution system into their payment processes.
Ensure transparency in deduction and deposit of contributions.
Collaborate with the government to raise awareness among workers.

A Step Toward Inclusive Growth

The proposed pension scheme for gig workers is a step in the right direction, addressing a long-standing gap in the social security framework. If implemented effectively, it will provide millions of gig workers with the much-needed financial security they deserve.

The gig economy is the future of work, and this initiative reflects the government’s commitment to ensuring the well-being of this growing workforce. With consultations in progress and a possible launch in the next few months, gig workers can look forward to a more secure and empowered future.

References:

Business Standard, “Govt Working on Pension Scheme for Gig Workers,” February 7, 2025

Disclaimer: This article is based on publicly available information and recent news reports from Business Standard dated February 7, 2025. For more details, readers are encouraged to visit the original publication.