EOBI grant is applicable to those employees who are service is less than 10 years, they can only be eligible to avail 1-time grant from EOBI. In this article, we’ll discuss what is EOBI grant what the grant calculation formula applied to different employees.
Let's discuss the key points of EOBI grand hereunder:
Employee’s Age Factor: As per EOBI Act, the maximum age
for receiving the EOBI Grant is 60 years for males and 55 years for age for
female employees.
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| What Is EOBI Grant Calculation Formula? |
Minimum Contributor Employment: According to the EOBI rules and regulations, the minimum insurable employment with continued contribution required to be eligible
for the EOBI Grant is 10 years. However, in a death case, the employee’s family can avail
grant from the actual date of death as per the NADRA record.
Average Minimum Wages: The average minimum wages for the last 10 years of insurable employment are used to calculate the EOBI Grant. The EOBI calculate grant using the following formula:
EOBI Grant = (Average Minimum Wages x No. of years of
Insurable Employment) / 10. For example, if an insured employee has worked for
15 years at an average minimum wage of Rs. 20,000 per month, their EOBI Grant
would be Rs. 300,000. But it will vary from time to time.
The EOBI Grant is a lump sum payment that is paid once, upon retirement. It is not a pension and does not provide any ongoing income. The EOBI Grant is a valuable benefit for insured persons who reach retirement age and do not have enough insurable employment to qualify for a pension. It can help to provide financial assistance and security in retirement.
What is EOBI Fund?
EOBI stands for Employees' Old-Age Benefits Institution.
It is a statutory body established by the Government of Pakistan in 1961 to
provide social security and safety to workers who work in the private sector
i.e. factories, NGOs, semi-governmental organizations, etc.
What Types of Benefits Does EOBI Provide?
Old-Age Pension (The pension amount is currently 10,000
per month effective from 1st July 2023)
- Employees Invalidity Pension
- Employees' Survivor's pension
- Employees Maternity Benefits
- Employees Injury Benefits
EOBI is funded by contributions from employers and employees. The employer contribution rate is 5% of the current minimum wage and 1% of the employee’s current minimum wage. EOBI is a valuable source of social security for workers in Pakistan.
It provides a safety net for workers who are unable to work due to old age, invalidity, or death. EOBI also helps to protect the families of workers who die in the workplace.
How Many Members are Registered with EOBI?
According to the EOBI database, EOBI has over 10 million enrolled members in the year 2023 and EOBI has paid out over Rs. 1 trillion in benefits since its inception. EOBI has a network of over more than 1,000 offices across Pakistan and it connected with people through regional offices.
What EOBI Old Age Grant Formula?
The EOBI Old Age Grant is a lump sum payment that is made to insured persons who reach retirement age and do not have enough insurable employment to qualify for a pension. The grant is calculated using the following formula: The Grant calculation formula earlier in the above lines, you can check it again to scroll up the arrow.
What Are EOBI Grant Eligibility Criteria?
- Exact Age of 60 for Males and 55 for Females:
- Have at least 10 years of insurable employment.
- Have paid all EOBI contributions:
If you are an insured person who is approaching
retirement age, you should contact EOBI to find out if you are eligible for the
EOBI Old Age Grant.
What is EOBI Old Age Grant?
The EOBI Old Age Grant is not a pension and does not provide any ongoing income.
The EOBI Old Age Grant is a one-time payment that is made
upon retirement.
The EOBI Old Age Grant is not taxable.
The EOBI Old Age Grant can be used to pay for any
expenses, such as healthcare, housing, or education.
The EOBI Old Age Grant can be transferred to a spouse or
child.
Frequently Ask Questions:
What Are The Rules For Contribution in EOBI?
The Employees Old-Age Benefits Institution (EOBI) is a
statutory body established by the Government of Pakistan to provide social
security benefits to employees in the private sector. The EOBI Act, of 1961
provides for the payment of contributions by employers and employees to the
EOBI. The contribution rates are as follows:
Employer's Contribution: 5% of the worker's minimum
wage.
Employee's Contribution: 1% of the worker's minimum
wage.
The employer is responsible for deducting the employee's
contribution from their wages and paying it to the EOBI. The employer must also
submit a quarterly return to the EOBI showing the total wages paid to their
employees and the amount of contributions deducted.
Old-age pension: A monthly pension is paid to members who reach the age of 60 and have completed at least 10 years of contributions.
Disability pension: A monthly pension is paid to members
who are permanently disabled and have completed at least 5 years of
contributions.
Survivors' benefits: A lump sum payment is paid to the
dependents of a member who dies while in insurable employment.
Medical benefits: Members are entitled to free medical
treatment at EOBI-run hospitals and dispensaries.
Eligible for EOBI Benefits:
Be employed in an industrial or commercial organization covered by the EOBI Act.
Earn a minimum wage.
Make contributions to the EOBI for at least 10 years (for
old-age pension) or 5 years (for disability pension).
The EOBI is a valuable source of social security for
employees in the private sector. By making contributions to the EOBI, workers
can ensure that they will have a steady income in retirement, if they become
disabled, or if they die while in insurable employment.
EOBI Rules For Contribution:
The employer is responsible for registering their employees with the EOBI.
The employer must keep a record of all contributions paid
to the EOBI.
The employee is entitled to a passbook from the EOBI
showing their contribution record.
The EOBI can impose penalties on employers and employees
who fail to comply with the contribution rules.
For more information on EOBI, please visit the EOBI
website at www.eobi.gov.pk.
Which Type of Employees Are Eligible for EOBI?
Be employed in an industrial or commercial organization covered by the EOBI Act.
Earn a minimum wage.
Make contributions to the EOBI for at least 10 years (for old-age pension) or 5 years (for disability pension).
Who is not Eligible for EOBI Benefits:
Government Employees:
Self-Employed Individuals:
Casual laborers:
What Are EOBI Eligibility Criteria?
The person must be a Pakistani citizen.
The person must be at least 18 years of age.
The person must be physically and mentally fit to work.
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