In the event of an EPFO member’s death, dependents or legal heirs may receive relief
EPFO: The Employees’ Provident Fund Organisation (EPFO) issued an important circular on December 17th. This could provide relief to dependents or legal heirs in case of the death of an EPFO member. The circular also clarifies that weekends or other holidays will not be considered a break in service when switching jobs.
According to the EPFO, the pension regulator has found that many death claims under the Employees’ Deposit Linked Insurance (EDLI) scheme are rejected or settled for a lower amount due to short gaps or breaks in service. It also found that the necessary assessments are not being conducted while the member is still in service before their death.
The regulator found that an employee had left their job on a Friday after completing more than 12 months of service and then started a new job at a different company on the following Monday. In this case, the Saturday and Sunday were considered a break in service. Consequently, the employee was deemed ineligible for EDLI benefits. The EPFO has attempted to address the issues arising from such breaks in service.
The EPFO circular states, “If service continues after a weekly off, national holiday, gazetted holiday, or state holiday on a Saturday, Sunday, or at the previous or new establishment, it will be considered continuous service. The condition is that the date of exit from one establishment covered under the EPF & MP Act, 1952, and the date of joining another establishment should be separated only by such off days/holidays.”
In addition, a job change with a gap of up to 60 days will be considered continuous service. The EPFO has also increased the minimum payout benefit for dependents and legal heirs under the EDLI scheme to ₹50,000. This benefit will be available even if the member has not completed 12 months of continuous service.
This benefit will be available even if the member’s PF balance is less than ₹50,000. The minimum EDLI payout will also be provided if the member dies within six months of their last PF contribution. The condition is that the member must be on the employer’s payroll at the time of death.
