Employees Provident Fund
EPFO: Employees Provident Fund Organization (EPFO) has recently announced a big relief for employed people. Under the Social Security Code 2020, the Central Government has notified ‘Employee Deposit Linked Insurance Scheme 2026’ (EDLI Scheme 2026), making important changes in the five decade old system. Under this new law, which has been implemented across the country from June 29, families of PF account holders will now get a free insurance cover of Rs 7 lakh as well as an additional assurance benefit of Rs 1 lakh depending on the PF balance.
Direct benefit on PF balance
The biggest attraction of the new EDLI 2026 scheme is the new assurance benefit related to PF balance. According to the new rules, if an EPF member unfortunately dies, the nominee will not only get the entire amount deposited in the PF account, but additional money will also be given as per a fixed formula. If the average PF balance of the employee is more than Rs 50,000, the family will get a fixed amount of Rs 50,000. An additional 40% of the amount above this will also be added. This direct benefit under this new provision has been fixed at a maximum of Rs 1 lakh.
old security intact
The government has preserved the benefits of life insurance by maintaining the goodness of the old rules. If an employee has worked continuously for 12 months before his demise, his family will be entitled to insurance under the old formula. This claim will be calculated by combining 35 times the average monthly salary of the employee and 50% of the average PF balance. Under this, a minimum claim of Rs 2.5 lakh and a maximum of Rs 7 lakh will be protected. In certain special circumstances, there is also an option for additional increase of 20% in the assurance benefit.
Cover will continue for 6 months after leaving the job
Often, after the PF contribution stopped, families had to face a lot of trouble in getting the claim. The government has increased the scope of the scheme by removing this shortcoming. Now, if an EPF member dies within 6 months of the last PF contribution while on the rolls of the company, his family will still be considered fully entitled to an insurance claim of Rs 7 lakh. This step will provide great relief to families in this period of uncertainty.
12% interest will be deducted from the pockets of officials on delay
EPFO has taken stringent steps to make the settlement of claims transparent and fast. Now it is mandatory to settle the insurance claim made with all the necessary documents within 20 days. If any officer does not pass the claim within this time limit without any solid reason, the department will pay penal interest at the rate of 12% per annum to the victim’s family. This fine will be collected directly from the pocket of the delaying officer. Apart from this, it has been made mandatory for employers to deposit the insurance fund through digital payment within 15 days. The entire process from claim submission to return filing has now been made 100% online.
