According to recent reports, the minimum assurance limit for The Employees’ Provident Fund Organization under the Employees’ Deposit Linked Insurance Scheme is said to be enhanced. From now on the assurance benefit for employees who contribute to EPF will be a minimum of Rs. 2.5 lakhs and can go up to Rs. 6 lakhs. Another good reason to be a member of EPF.
If you by the notification then this particular provision will be in action for a period of 2 years from the date the notice was published, that is February 15. In the past years, the minimum amount of benefit was a minimum of Rs. 1.5 lakhs. In the year 2015 during September Central Board of Trustees decided to hike the benefits under the EDLI scheme. The new benefit scheme will give 3.5 lakhs minimum to Rs. 6 lakhs max, this was notified in 2016 in the month of June.
Understanding Employees’ Deposit Linked Insurance Scheme
People who are a member of EPF are automatically entitled to get the benefit of EDLI that is the Employees’ Deposit-Linked Insurance Scheme which was set in the year 1976. According to this scheme, everybody gets an assured benefit where in case of a sudden demise of the employee during his/her working life, the insurance cover is to be paid to the nominee. The insurance is a payment that is linked to the average balance an employee has in his PF account. This payment then goes to the nominee from the family when the employee dies during his tenure.
The employee doesn’t have to add any nominee separately for the EDLI scheme. This scheme will be applied automatically to all the employees under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
Contribution under EDLI
No employee has to contribute separately to the EDI scheme; however, the employer has to contribute. The employer will be contributing 0.5% of the employee’s wages. The commitment by the business is 0.5 percent of the worker’s wages and the commitment is to be paid on up to most extreme wage roof of Rs 15,000 regardless of whether PF is paid on higher wages. The greatest, subsequently, is topped at Rs 75 and is to be paid as long as the part is in administration and PF is being paid. According to the guidelines, the employer isn’t qualified to deduct the employer’s commitment payable by him from the wages of the representatives or to recoup it from them in some other way. Furthermore, the employer needs to pay an organization charge towards ELDI which is 0.1 percent of wages or at least Rs 200.
How to calculate the benefit under EDLI
The normal month to month compensation drawn (subject to a greatest of Rs 15,000), amid a year going before the month in which the worker passes away, is increased by 30 times in addition to 50 percent of the normal adjust in the record of the expired in the provident fund during the previous 1 year or amid the time of his enrolment, whichever is less. The base payable will currently be Rs 2.5 lakhs while the most extreme will be Rs 6 lakhs.