EPFO: The Employees’ Provident Fund Organization (EPFO) issued an important circular on December 17th. This could provide relief to dependents or legal heirs of an EPFO member who has passed away. It also clarified that weekends or other holidays will not be considered breaks when switching jobs.
According to the EPFO, the pension regulator has found that many death claims under Employees’ Deposit Linked Insurance (EDLI) are rejected or settled for lower amounts because of a small gap or break in service. It has also found that the necessary assessments are not carried out while the member was in service before his death.
Now claims will not be rejected due to small gaps
The regulator found that an employee had left his job on Friday after completing more than 12 months of service. He then joined another company on Monday. In this case, Saturday and Sunday were considered breaks in service. Consequently, he was not eligible for EDLI benefits. The EPFO has attempted to address the issues associated with such breaks in service.
Weekends or holidays are not a reason for service breaks
The EPFO circular states, “Service continued on Saturdays, Sundays or after any weekly off, national holidays, gazetted holidays, state holidays in the previous or new establishment will be treated as continuous service. The condition is that the date of exit from one establishment covered under the EPF & MP Act, 1952 and the date of joining the other establishment should be different only on account of such off/holidays.”
Minimum payout under EDLI scheme is Rs 50,000
Additionally, job changes with a gap of up to 60 days will be considered continuous service. The EPFO has also increased the minimum payout benefit for dependents and legal heirs under the EDLI scheme to Rs 50,000. This benefit will be available even if the member has not completed 12 months of continuous service.
This benefit is available even if the member’s PF balance is less than Rs 50,000. If the member passes away within six months of their last PF contribution, they will still receive the minimum EDLI payout. The condition is that the member must be on the employer’s roll at the time of death.