Should Joint Account Be Continued For Family Pension After Death of Pensioner?

Often it happens in the case of demise of the pensioner, the spouse is left worried whether a new bank account has to be opened for receiving pension benefits. This is especially true in the case of wives, who are to receive pension of the deceased husband.

However, it is not necessary to open a new bank account and banks should allow the existing bank account in case of Central Government pensioner if the spouse in whose favour an authorization for family pension exists in the Pension Payment Order (PPO) is the survivor. The family pension should be credited to the existing account without opening a new account by the family pensioner for this purpose.

Often there are other questions with regards to payment of income tax, as per the Income Tax Act and who be liable to pay the same for the surviving spouse who receives the pension. The bank is liable to deduct tax on the pension paid. This would be as per the latest provisions of the Income Tax Act for that financial year.

Sometimes there is a delay in paying the pension. In such cases, the pension paying banks should compensate the pensioner for delay in crediting pension/ arrears thereof at a fixed interest rate of 8 per cent per annum for the delay after the due date of payment. This compensation should be credited to the pensioner's account automatically without any claim from the pensioner on the same day when the bank affords credit for revised pension/ pension arrears, in respect of all delayed pension payments made since October 1, 2008.

Clearly, pensioners have been protected through various rights that they have. Some of the pensioners are retired and care should be taken that they are not hassled and all possible help is granted to them to facilitate ease in receiving pension.