EDLI Scheme: Government has made many important changes in the EDLI scheme, know how EPF members will benefit

EDLI Scheme: The Employees’ Provident Fund Organization (EPFO) has announced important changes in the Employees Deposit Linked Insurance (EDLI Scheme) scheme.

The Central Board of Trustees (CBT), chaired by Union Labor Minister Mansukh Mandaviya, approved these amendments in its 237th meeting. Apart from this, the board recommended an interest rate of 8.25% on Employees’ Provident Fund (EPF) deposits for the financial year 2024-25. After the interest rate is officially notified by the central government, the EPFO ​​will deposit the interest rate in the accounts of the subscribers.

Many important changes made in EDLI scheme

After actuarial evaluation of Employees Deposit Linked Insurance Scheme (EDLI Scheme), the Board has approved major amendments in the scheme to provide greater financial security and support to the families of members.

1. Commencement of minimum benefit on death within one year of service

A minimum life insurance benefit of Rs 50,000 will be provided if the EPF member dies without completing one year of continuous service. This amendment is expected to provide more benefits in cases of more than 5 thousand deaths occurring during service every year.

2. Benefit for members deceased while in service after non-contribution period

Earlier, EDLI benefit was denied in such cases as these were treated as deaths outside service. Now, EDLI benefit will be admissible if a member dies within six months of receiving his last contribution, provided the member’s name has not been removed from the rolls. With this amendment, it is estimated that more than fourteen thousand cases of such deaths will get the benefit every year.

3. Consideration of service continuity

Earlier, a gap of one or two days (such as weekends or holidays) between employment in two establishments denied the minimum EDLI benefit of Rs 2.5 lakh and maximum of Rs 7 lakh, as the condition of continuous service of one year was not met. Under the new amendments, a gap of up to two months between two spells of employment will now be considered as continuous service. This will ensure eligibility for a higher amount of EDLI benefit. This change is expected to benefit more than a thousand cases of death in service every year.

These amendments are expected to result in more than 20 thousand cases of death during service every year getting more benefits under EDLI. These reforms are aimed at increasing the social security benefits for the families of EPF members, ensuring better financial security and reducing the hardships of distressed families.

Government’s big decision on EPF interest rates

EPFO has retained the interest rate of 8.25% on Employees’ Provident Fund (EPF) deposits for 2024-25. The Employees’ Provident Fund Organization (EPFO) had marginally increased the interest rate on EPF from 8.15% in 2022-23 to 8.25% for 2023-24 in February 2024. The 8.5% interest rate on EPF deposits for the financial year 2020-21 was decided by the CBT in March 2021. After the decision of the CBT, the interest rate on EPF deposits for 2024-25 will be sent to the Finance Ministry for approval.