ESIC – EPFO – EDLI SCHEME

ESIC – EPFO – EDLI SCHEME

Subject : Government Schemes

Context : The Ministry of Labour and Employment on Sunday announced additional benefits for workers through social securities schemes run by the EPFO and the ESIC amid the COVID-19 pandemic.

Concept :

• These benefits include pension for dependents of insured persons with Employees” State Insurance Corporation (ESIC) who died due to COVID-19 and hike in maximum sum assured under the group insurance scheme Employees” Deposit Linked Insurance Scheme (EDLI), run by Employees” Provident Fund Organisation (EPFO), to Rs 7 lakh from Rs 6 lakh.

EDLI Scheme

• The EDLI scheme was launched in 1976 to provide insurance benefits to members of EPFO.
• The main objective of EPFO behind this scheme was to ensure that the family of members get financial assistance in case of death of the member. There is no exclusion under this insurance scheme.
• The insurance cover depends on the salary drawn in the last 12 months of the employment before death.

Salient Features of EDLI

• The insurance benefits can be availed by the family members, legal heirs or nominees of the member.
• Members of EPFO are automatically enrolled for EDLI.
• An EPFO member is only covered by the EDLI scheme as long as he/she is an active member of the EPF. His family/heirs/nominees cannot claim it after he leaves service with an EPF registered company.
• There is no minimum service period for availing EDLI benefits
• The employer has to make the contribution for EDLI and no fee can be deducted from the employee’s salary
• The claim amount under ELDI is 35 times the average monthly salary in the past 12 months subject to a maximum of 7 lakh.
• The average monthly salary is calculated as the Basic + Dearness Allowance of the employee
• A bonus of Rs. 1.75 Lakhs is also applicable under this scheme
• The employer can opt out of the scheme in case he takes a higher paying life insurance scheme for employees under Section 17 (2A)