Amid the COVID-19 pandemic, the Ministry of Labour and Employment has announced a slew of changes under the Employees’ Provident Fund Organization (EPFO). These benefits include pension for dependents of insured persons with Employees' State Insurance Corporation (ESIC) who died due to COVID-19 and a hike in maximum sum assured under the group insurance scheme Employees' Deposit Linked Insurance Scheme (EDLI).
These measures, according to market experts, will provide much-needed support to the subscribers and their families, while protecting them from financial hardships.
Let’s understand the measures in detail:
Increase in deposit linked insurance benefits to Rs 7 lakh
The EPFO has hiked the maximum assurance benefit to up to Rs 7 lakh under the Employees’ Deposit Linked Insurance (EDLI) scheme. This scheme is a mandatory insurance cover provided to all subscribers of the EPF scheme.
Under EDLI, the registered nominee receives a lump-sum payment in the event of the death of the person insured, during the period of the service. However, the claim amount depends on the salary drawn in the last 12 months of the employment of the deceased (this will be subject to a maximum of Rs 7 lakh now).
The minimum death cover has been increased to Rs 2.5 lakh effective retrospectively from February 15, 2020.
According to Pooja Ramchandani, Partner, Shardul Amarchand Mangaldas & Co, this is a beneficial change not only because of increase in the quantum of benefit but also because it can be availed irrespective of change in employment, thereby will render financial support to the families of the deceased member.
Minimum assurance benefit of Rs 2.5 lakh to eligible family members of employees who was a member for continuous 12 months in one or more firms
The minimum assurance benefit of Rs 2.5 lakh will be provided to eligible family members of deceased employees who was a member for a continuous period of 12 months in one or more establishments preceding his/her death in place of the existing provision of continuous employment in the same establishment for 12 months.
Availability of second COVID-19 advance
EPFO has allowed its over five crore subscribers to avail of the second COVID-19 advance in view of the second wave of coronavirus infections in the country. Under this provision, non-refundable withdrawal to the extent of the basic pay and dearness allowances (which forms basic wages) for three months or up to 75 percent of the amount standing to member's credit in the EPF account, whichever is less, is provided.
The provision and process for withdrawal of the second COVID-19 advance are the same as in the case of the first advance.
Earlier last year, the retirement fund body had allowed its members to withdraw COVID-19 advance to meet exigencies due to the pandemic.
(Edited by: By Aditi Gautam)