Govt agrees to up EDLI scheme benefit to Rs 1 lakh
Mar 24 2010 , New Delhi
The labour ministry has accepted a proposal to raise the ceiling of benefit under
the Employees Deposit-Linked Insurance (EDLI) Scheme from Rs 60,000 to Rs 1 lakh, a move that would help over 4.71 crore EPFO subscribers.
"The labour ministry has written to the Employees' Provident Fund Organisation (EPFO) for increasing the benefit under the EDLI Scheme from Rs 60,000 to Rs 1 lakh," an official told PTI here today.
"The ministry has also asked the EPFO to place the matter before its apex body Central Board of Trustees for making the necessary amendments in the scheme," the source said, adding, "the matter would be placed before the EPFO trustees at the April 9."
Under the existing scheme, an EPFO subscriber gets insurance cover and gets benefit of up to Rs 60,000 in case he/she dies before superannuation.
The unions have been for long demanding this enhancement as the outflow from the EDLI corpus as payment of claims is much less than the receipts. The corpus under the scheme has rose to Rs 7,457.69 crore in 2008-09 from Rs 7,089.29 crore in the preceding fiscal on account on rising contribution. The amount given towards settlement, however, has remained constant at Rs 48 core during these three years.
In 2008-09, the EPFO received Rs 368.40 crore for the scheme but settled claims of just Rs 48.36 crore. In 2007-08, while Rs 308.40 were contributed toward the scheme, claims were just Rs 48.33 crore.
Similarly, the contribution remained higher at Rs 250.65 crore against settled claims of Rs 47.96 crore under the scheme in 2006-07.
The employers contribute 0.5 per cent of basic pay of an employee as insurance premium to the EDLI scheme every month. The benefit under the scheme is given on the basis of the provident fund balance in the subscriber's account.
At present, if a subscriber's PF account balance is up to Rs 35,000 then the benefit would BE equivalent to the fund balance only.
But in case, the PF balance is over 35,000, the benefit would be Rs 35,000 and 25 per cent of excess balance over Rs 35,000. But this is with a rider: the maximum benefit could not be above Rs 60,000.
Under the proposed amendment, the subscriber would get the benefit equivalent to the PF account balance if the balance is up to Rs 50,000. But if the balance exceeds Rs 50,000, the benefit would be account balance plus 40 per cent of of balance, subject to maximum of Rs 1 lakh.