Senior Citizen Welfare Fund

The Senior Citizen Welfare Fund (SCWF) is a fund which provides financial support to the Below Poverty Line (BPL) category senior citizens. It was introduced by the Government of India to help senior citizens who do not have any means of livelihood. The SCWF was instituted by the Finance Act, 2015. It came into effect on 18.03.2016. The government observed that a large corpus of funds was available in the various government savings schemes. The funds fall under the category of inoperative accounts. Over time, the funds are classified as ‘unclaimed deposits’. The need was felt to channelise the funds towards a useful purpose. At the same time, the need was felt to improve the lives of senior citizens. Thus, the government introduced the SCWF to address both the concerns. Unclaimed deposits invested with the government institutions would be transferred to the SCWF. The funds available with the SCWF would be used exclusively for helping senior citizens. The SCWF is an apex-level fund which is managed by the Central Government. Senior citizens can make use of the SCWF by availing of the various schemes launched under the fund. The 'Ministry of Social Justice and Empowerment' (MSJ) is responsible for administering the SCWF. In 2017, the MSJ introduced a scheme known as Rashtriya Vayoshri Yojana to help senior citizens. The scheme was funded from the SCWF. On 04.12.2019, the MSJ announced the introduction of three additional schemes. The new schemes will be funded entirely from the SCWF.

Objectives of the SCWF

To ensure the financial security of senior citizens
To provide old-age pensions to senior citizens who do not have any other source of income
To enact rules specifying that particular long term savings instruments can be subscribed to only by senior citizens
To allow for the employment of senior citizens in income-generating activities
To develop schemes for promoting proper nutrition of senior citizens
To implement nutrition education programs for senior citizens
To implement affordable health care programs and mental health services for senior citizens
To formulate health insurance schemes for senior citizens
To provide suitable training and orientation to public health care workers to address the needs of senior citizens
To introduce schemes for promoting the welfare of elderly widows
To introduce schemes related to old age homes for senior citizens
To introduce schemes that are aimed at addressing the information needs of senior citizens
To introduce schemes for conducting research activity on ageing and age-related health problems

Eligible Investments

The following investments are available for making contributions to the SCWF:

Post Office Savings Account
Public Provident Fund Account
Employees’ Provident Fund Account

Unclaimed deposits which are available with the above accounts will be transferred to the SCWF.

Procedure for Transfer of Funds

An inoperative account is a savings account which has not been operated for three years. In case the account is a deposit account, the three-year time-limit applies from the date of maturity. The terms of the account may provide that the account can be operated jointly by two or more persons. In such cases, the account is said to become inoperative only if none of the account-holders operates the account.
An account is allowed to remain as an inoperative account for a maximum of seven years. After the elapse of seven years, the account is declared as an ‘unclaimed deposit’. All unclaimed deposits should be transferred to the SCWF within one year. The one year mentioned should be calculated from the date on which the account is classified as ‘unclaimed deposit’.
Every year the Post Office, Public Provident Fund Authority and Employees’ Provident Fund Authority prepare a list of accounts that are classified as ‘unclaimed deposits’. The lists should be prepared before 30th September every year. The lists should also be published on the websites of the respective departments. The branch office in which the account holder is maintaining an account should publish a physical copy of the list. The list should be displayed prominently on the notice-board. The list should be printed in a font size which will permit reading from a distance of three feet.
Within sixty days of publishing the list, the department should contact the account holder. The communication should be made by sending a written notice. Apart from the notice, the department may also try to contact the account holder by e-mail and phone call. The list should remain on the notice-board and website of the department for at least sixty days.
The account holder is permitted to reclaim his deposit even after the funds have been transferred to the SCWF. The permission to reclaim the funds will remain with the account holder for twenty-five years. After twenty-five years the funds will undergo ‘escheatment’. Escheatment implies that the funds cannot be reclaimed by the account holder.

Budgetary Allocation

The Inter-Ministerial Committee (IMC) should provide a report of budgetary allocation to the Central Government. The report should be presented as part of the overall budget for the subsequent financial year (FY). The budgetary report is a description of how the government plans to use the money accumulated in the SCWF. The report is prospective and enumerates the plans of the government for the future utilisation of the SCWF.
Every year before 1^st May, the IMC prepares an annual report. The report mentions how the funds in the SCWF were utilised in the previous FY. The annual report should contain the following details:
- The activities that are undertaken by the IMC towards improving the quality of life of senior citizens
- The schemes approved for funding from the SCWF
- The major decisions of the IMC and the financial impact of the decisions
- The schemes pending for approval with the IMC
- Details of the amounts deposited into the SCWF
- Details of the amounts withdrawn from the SCWF
Both of the reports should be submitted for the perusal of the Lok Sabha and Rajya Sabha.