News Alert: The Pension Fund Regulatory and Development Authority (PFRDA) issued a landmark circular on January 27, 2026, launching the NPS Swasthya Pension Scheme (NSPS). This initiative, introduced as a “Proof of Concept” (Pilot), allows NPS subscribers to use a portion of their pension corpus specifically for healthcare expenses, including OPD and hospitalization.
Clarification: This is NOT a free medical insurance scheme. It is a “Health-Linked Pension” product where you save your own money to pay for medical bills later. It functions separately from your primary pension account.
• This is a Voluntary & Contributory scheme.
• Exclusion: Government sector employees are currently EXCLUDED from the option to transfer 30% of their existing corpus to this new Swasthya account (as per current pilot rules).
What is NPS Swasthya Pension Scheme?
The NSPS is designed to act as a financial cushion for medical emergencies in old age. Unlike health insurance, where premiums are a sunk cost, the money in NSPS remains yours and grows with market returns until utilized.
Key Features of the Pilot:
- Eligibility: Any Indian Citizen (Voluntary).
- Min Corpus Required: ₹50,000 (to start withdrawals).
- Account Type: A separate “Swasthya Account” linked to your PRAN.
- Usage: Covers both Out-Patient (OPD) and In-Patient (Hospitalization).
Withdrawal Rules: 25% vs 100%
The PFRDA has relaxed the exit rules for this specific account to make it useful for medical needs. There are two main withdrawal limits:
| Scenario | Withdrawal Limit | Condition |
|---|---|---|
| Regular Medical Need | 25% of Own Contribution | Can be withdrawn anytime (No Lock-in). |
| Catastrophic Illness | 100% (Full Exit) | If bill exceeds 70% of total corpus. |
| Unused Balance | Refundable | Returns to main Pension Account if not used. |
The scheme uses a Third Party Administrator (TPA) or Health Benefit Administrator (HBA) to validate claims. Payments are made directly to hospitals or reimbursed to the subscriber.
Comparison: NPS Swasthya vs EPS-95 Medical Demand
Many pensioners have confused this new scheme with the demands of the EPS-95 National Agitation Committee (NAC). It is crucial to understand the difference.
- NPS Swasthya: You pay money now → Use it for health later. (Self-funded).
- EPS-95 Demand: Pensioners want Free Medical Facilities (Government-funded).
For the latest status on the EPS-95 demands, read our report on Latest Eps 95 Minimum Pension News Jan 2026 Status.
The “Transfer” Rule (Govt Employee Limitation)
For private sector subscribers (All Citizen Model) aged above 40, PFRDA allows a one-time transfer of up to 30% of their existing NPS corpus into the Swasthya Account. However, the circular explicitly states that Government Sector subscribers are currently excluded from this “Transfer” facility.
Is this a health insurance policy?
No. It is a savings account. If your hospital bill is ₹5 Lakh and you have only ₹2 Lakh in your NPS Swasthya account, you can only pay ₹2 Lakh. Insurance covers risk; this covers savings.
Can I withdraw money for buying medicines?
Yes, the scheme covers Out-Patient Department (OPD) expenses, which includes doctor fees and medicines, provided you have a minimum accumulated corpus of ₹50,000.
Is it mandatory to join?
No, it is purely voluntary. PFRDA has launched it as a pilot to test if people are interested in a health-dedicated pension bucket.
हिंदी सारांश
पीएफआरडीए ने 27 जनवरी 2026 को ‘एनपीएस स्वास्थ्य पेंशन योजना’ (NPS Swasthya) का पायलट प्रोजेक्ट शुरू किया है। यह एक अलग खाता होगा जिसमें आप इलाज के लिए पैसा जमा कर सकते हैं। यह मुफ्त बीमा नहीं है, बल्कि आपकी अपनी बचत है। इसमें से बीमारी के समय 25% तक पैसा निकाला जा सकता है। सरकारी कर्मचारियों को फिलहाल अपनी पुरानी जमा पूंजी में से पैसा इसमें ट्रांसफर करने की अनुमति नहीं दी गई है।
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