Centre Set to Hike EPF Wage Ceiling and Minimum Pension Following Supreme Court Mandate

The central government is set to revamp India’s social security system with a significant EPFO update in 2026. This change promises better financial protection for millions of private-sector workers. A key part of this reform is the proposed increase in the EPF wage ceiling, which has stayed at ₹15,000 since 2014. Reports indicate it could rise to ₹21,000 or ₹25,000, greatly expanding mandatory provident fund coverage.

Union Labour Minister Mansukh Mandaviya confirmed that this move aims to adjust legal benefits to match current inflation and the increasing minimum wages across different states. At the same time, the ESIC salary limit is likely to increase, allowing more workers to access important medical and sickness benefits.

This legislative effort gained speed after a strong Supreme Court order in January 2026. The court told the Centre to update the outdated salary cap within four months to stop mid-income earners from being left out of welfare programs. Meanwhile, the government is looking into a significant increase in the Employees’ Pension Scheme (EPS-95) in response to ongoing calls to raise the minimum monthly pension from its current level of ₹1,000, ensuring dignity after retirement.

The EPFO interest rate for FY 2025-26 is currently under review, with estimates suggesting a minor adjustment between 8% and 8.2%. Overall, these reforms are expected to have a very positive impact. By expanding eligibility and strengthening the retirement fund, the new EPFO and ESIC guidelines mark an important step in securing the long-term well-being of India’s formal workforce.