Atal Bimit Vyakti Kalyan Yojana: Will this help if you become unemployed?

The Atal Bimit Vyakti Kalyan Yojana is a new unemployment insurance scheme. Will this provide enough relief if we lose our jobs? Let us find out how the scheme works, its benefits and features

Published: December 14, 2019 at 11:28 am

Last Updated on December 14, 2019 at 11:28 am

Atal Bimit Vyakti Kalyan Yojana (ABVKY) is an unemployment insurance scheme that will provide cash relief to an insured person who becomes unemployed. This is run by the Employee’s State Insurance (ESI) Corporation. In this FAQ, let us find out if this welfare scheme will make a difference if you become unemployed. This is a guest post by Pratik Jain.

What benefit does ABVKY provide?  The scheme computes the per day salary earned two years from the date of unemployment  (using six-month blocks, see example below). It will pay 25% of this per day salary for 90 days. This is a one-time benefit and not a monthly payout! Other conditions of payment are listed below.

How does one sign up for the scheme? The employer should pay the premium for this scheme to the ESI from the CTC.

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Atal Bimit Vyakti Kalyan Yojana: Eligibility and Benefits

This will run on a pilot basis for the first two years. This will co-exist with the existing RGSKY scheme (see below) but you can avail benefits of either of them.

ABVKY Eligibility:

  1. Insured Person should be Unemployed when relief is claimed.
  2. Insured Person should have been contributed to ESI for at least 2 years immediately before his/her Unemployment.
  3. In his last four preceding contribution period, he must have contributed not less than 78 days for each contribution.
  4. Unemployment should not be the result of punishment for misconduct or retirement.
  5. The claim will be approved after three months of unemployment.

ABVKY Benefits:

  1. 25% of the Average daily salary during the last four contribution periods up to a maximum of 90 days.
  2. This benefit can be claimed once in a lifetime.
  3. The benefit will be given only for a clear month of unemployment.
  4. The Benefit will be paid to the only insured person to his bank account linked with Aadhar Card.
  5. Insured Person will still be eligible for any Medical benefits.
  6. No prospect claim – ie. claim for a future period is allowed under ABVKY.


  1. If you get a new job.
  2. If you have opted for voluntary retirement.
  3. If this unemployment is due to strike.
  4. If in-between of the 90 days relief period you get a job then you will not be able to claim the remaining days of relief. In such cases, a balance of 90 days can be claimed if Insured Person renders unemployment again from 1 year of initial unemployment.
  5. The claim should be provided from one year of Unemployment.

The Claim can be provided online via ESIC Portal or at the appropriate Branch office with Affidavit and prescribed form.

Benefit Illustration

Suppose a person earning Rs. 20,000 a month becomes unemployed.  If Rs. 4,80,000 is the total salary earned during the last 24 months (six months x 4, where each six-month block is known as a contributing period).

The approximate daily wage = 480000/730 =656 (here 730 is the number of days)

Now 25% of this amount is Rs. 164. This amount will be paid for 90 days.

ABVKY Amount = Rs. 164 x 90 = Rs. 14,760. This is a one-time payment.

Before we discuss if this is enough, let us consider the features of the old scheme.

Rajeev Gandhi Shramik Kalyan Yojana(RGSKY)

This is an existing unemployment insurance scheme that only covers Job Loss due to closure of factory, retrenchment and Permanent Invalidity. This Scheme gives Unemployment Allowance for a maximum of two years.

RGSKY Eligibility:

  1. Insured Person can avail Benefit after one month of continuous unemployment. 
  2. Your previous employer must have been covered under ESI act and you must have paid at least 2 years of contribution. 
  3. Your age must be less than 60.
  4. Job loss is due to retrenchment, Closure of Factory, Permanent Invalidity.
  5. Any other type of unemployment is not covered under this scheme. For eg. Unemployment due to non-compliance.

RGSKY Benefits:

  1. 0 – 12 Month – 50% of Average Daily Salary.
  2. 13- 24 Month – 25% of the average Daily Salary.
  3. The Benefits Are not Combined with any medical Benefits. You cannot avail any other Cash Benefits except Medical after receiving these benefits.
  4. The amount is paid to the Insured person only to his Bank Account.
  5. Training will also be provided to increase the skills of employees.


  1. If you lose a job due to strike.
  2. You get a new job
  3. You opt for Voluntary Retirement.
  4. You lost the job due to punishment or some offence.

Will the ABVKY benefit help if you become unemployed?

If someone earns 20k per month his one-time benefit under ABVKY approximately will be close to 15k or just about enough to get by for a month.

While this is a big step in the right direction, re-employment may not be possible within that time. Also, this can be claimed only once in a lifetime.  Since companies nowadays prefer fixed-term employment instead of permanent employment, one may need this benefit more than one!  

There should be an option to pay a higher premium and get higher benefits and/or for a longer duration. Also, the ease of getting this amount is unknown and given how these schemes operate will likely take a lot of paperwork and time.

The introduction of Atal Bimit Vyakti Kalyan Yojana is a welcome development but cannot replace a solid emergency fund in the case of job loss. If you have not built one, you can do so with the help of this article: Worried About Losing Your Job? A Guide to Handle Potential Sudden Loss of Income

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