EPFO new rule: Deposit Linked Insurance benefits hiked to ₹7 lakh. Details here2 min read . Updated: 09 Sep 2020, 06:28 PM IST
- The EDLI scheme is a mandatory insurance cover provided to to all subscribers of EPF scheme
- The insurance cover depends on the salary drawn in the last 12 months of the employment before death
In a bid to help crore of employees amid coronavirus pandemic, the Employees’ Provident Fund Organisation (EPFO) on Wednesday increased the maximum assurance benefit under the Employees’ Deposit Linked Insurance (EDLI) scheme to ₹7 lakh from the existing cover of ₹6 lakh. "Central Board of Trustees, Employees’ Provident Fund (EPF) accorded approval for amendment of paragraph 22(3) of Employees’ Deposit Linked Insurance Scheme, 1976 to enhance the maximum assurance benefit to ₹7 lakhs from the present maximum assurance benefit of ₹6 lakhs," the ministry of labour and employment in a statement.
The EDLI scheme is a mandatory insurance cover provided to to all subscribers of EPF scheme. A nominee gets a lump sum payment of up to ₹7 lakh in the event of death due to natural causes, illness or accident. All organisations covered under EPF and Miscellaneous Provisions Act, 1952 get enrolled for EDLI automatically.
The insurance cover depends on the salary drawn in the last 12 months of the employment before death. The employer and central government contribute to EDLI scheme. The employee does not need to contribute to deposit linked insurance scheme. The claim amount under this scheme is 30 times the average monthly salary in the past 12 months subject to a maximum of 7 lakh.
Earlier this year, the CBT said that the benefit of EDLI will be provided to family members of a deceased employee, who dies while in service, even if he worked in more than one firm in the 12 months preceding his death.
"CBT was also informed that the actuarial valuation of EDLI Fund has allowed for continuation of minimum assurance benefit of ₹2.5 Lakhs beyond 14.02.2020 and extension of minimum assurance benefit of ₹2.5 Lakhs to family of those deceased members who were employed in multiple establishments during the 12 months preceding the month in which they died, as approved by CBT EPF in its 226th meeting," the ministry of labour and employment said in a statement.
The central board of the EPFO Wednesday said that it will pay out the 8.5% interest to the EPF subscribers for 2019-20 in two instalments. The retirement fund body has decided to credit 8.15% interest into the subscribers’ account first, while the remaining 0.35% will be credited in December.
"In view of exceptional circumstances arising out of Covid-19, the agenda regarding interest rate was reviewed by the Central Board and it recommended the same rate @ 8.50% to the Central Govt. It would comprise of 8.15% from debt income and balance 0.35% (capital gain)from the sale of ETFs subject to their redemption by 31st December, 2020. It further recommended to account such capital gains in the income of the financial year 2019-20 as being an exceptional case," the statement said.
From April to August, EPFO has settled 94.41 lakh claims, disbursing about ₹35,445 crore to its members. To help its members tide over the liquidity needs during the coronavirus crisis, EPFO fast tracked settling of COVID19 advances and illness related claims.