The Employees’ Provident Fund Organization (EPFO) has rolled out some significant updates to the Employees Deposit Linked Insurance (EDLI Scheme). These changes were greenlit by the Central Board of Trustees (CBT) during their 237th meeting, which was led by Union Labor Minister Mansukh Mandaviya.
In addition to the EDLI updates, the board has also suggested an interest rate of 8.25% for Employees’ Provident Fund (EPF) deposits for the financial year 2024-25. Once the central government officially announces this rate, the EPFO will credit the interest to subscribers’ accounts.
Key updates to the EDLI scheme
Following an actuarial review of the EDLI Scheme, the Board has approved significant changes aimed at enhancing financial security for members’ families.
Minimum benefit for death within the first year of service
If an EPF member passes away before completing one year of continuous service, a minimum life insurance benefit of Rs 50,000 will be provided. This change is expected to help in cases of over 5,000 deaths that occur during service each year.
Benefits for members who die while in service after a non-contribution period
Previously, if a member died after a non-contribution period, they were not eligible for the EDLI benefit as it was considered a death outside of service. Now, if a member dies within six months of their last contribution and their name is still on the rolls, they will be eligible for the EDLI benefit. This amendment is projected to assist over 14,000 cases of such deaths annually.
Service Continuity Considerations
Previously, if there was a break of one or two days—like weekends or holidays—between jobs, individuals missed out on the minimum EDLI benefit of Rs 2.5 lakh and the maximum of Rs 7 lakh because they didn’t meet the one-year continuous service requirement. Thanks to the new amendments, a gap of up to two months between jobs will now count as continuous service. This change means more people will qualify for a higher EDLI benefit. It’s estimated that this will positively impact over a thousand cases of in-service deaths each year.
These updates are projected to help more than 20,000 families of deceased employees annually receive better benefits under the EDLI scheme. The goal of these reforms is to enhance social security for EPF members’ families, providing them with better financial stability and easing the struggles of those in distress.
Key Changes in the EDLI Scheme
1. A provision of Rs 50,000 will be available if the account holder passes away within a year.
2. Previously, there was no support for those who hadn’t completed six months; now, assistance will be available as long as their name is on the payroll.
3. Short gaps between jobs will now be treated as continuous employment.
4. There’s also been talk about reviewing the increase in the minimum pension amount.