The EPFO, in its 237th meeting of the Central Board of Trustees (CBT), announced certain changes in its Employees’ Deposit Linked Scheme (EDLI). Under the Employees’ Provident Fund (EPF), EDLI is an essential social security program that offers financial security to the families of EPF members in the event of the untimely death of the EPF member while they are working.
The new changes aim to help the EPF family members in making their life easier while filing death claims. The announced changes will benefit thousands of families annually by increasing insurance payouts and extending coverage. The meeting took place on February 28, 2025.
Three major changes announced in the Employees’ Deposit Linked Scheme (EDLI)
The three changes announced by EPFO’s CBT in the meeting are as follows:Introduction of minimum EDLI benefit on EPF member death within one year of service
One of the significant changes announced by EPFO is the introduction of the minimum EDLI benefit for the EPF members who have joined the EPF scheme recently and died within one year of service. As per the announcement, family members of the EPF member will get a minimum life insurance payout of Rs 50,000 if the newly joined EPF member dies within one year of service.
“A minimum life insurance benefit of Rs. 50,000 will be provided in cases where an EPF member dies without completing one year of continuous service. This amendment is expected to result in higher benefits for more than 5,000 cases of deaths in service every year,” said the EPFO in its press release.
EDLI death benefit for members who die while in service after non-contributory period
The second EDLI announcement relates to extending death benefits to family members of EPF members who died while in service after a non-contributory period. As per the old rule, the death claim in the EDLI benefit was denied if an EPF member died after a period while in service after the non-contributory period. These death cases were considered as death outside active service.As per the new rule, the EDLI death benefit will be given to the family members if the EPF member passes away within six months of the last contribution received in their EPF account and name is not stuck off from rolls.As per the EPFO, “The modification is estimated to result in benefits for more than 14,000 cases of such death cases every year.”
Consideration of service continuity for EDLI despite employment gaps
The final change in the EDLI death benefit, as announced by the EPFO, relates to the consideration of service continuity in case of employment gaps. As per the old rule, the EDLI death benefit was denied to the family members for a short gap of, say, one or two days (such as weekends or holidays) as EPF members were switching jobs. Due to this, family members were not getting minimum EDLI benefit of Rs 2.5 lakh and maximum death benefit of Rs 7 lakh. This was because the condition of continuous service of one year was not met.
Under the new rule, a gap of up to two months between two spells of employment will now be considered as continuous service, ensuring eligibility for higher quantum EDLI benefits. “This change is expected to benefit more than 1,000 cases of deaths in service every year, said EPFO.
These improvements aim to enhance the social security benefits for families of EPF members, ensuring better financial protection and reducing hardships faced by families in distress.
EPFO said, “The updated EDLI program strengthens the government’s commitment to improving social security and employee welfare by filling important gaps and providing coverage in previously unqualified situations, ensuring that the families of departed EPF members get the money they require.”
What is the Employees’ Deposit Linked Insurance (EDLI) Scheme of EPFO?
The EDLI scheme under EPFO offers life insurance to employees covered under the EPF scheme. The scheme was launched by the Government of India in 1976. Family members get a maximum death benefit of Rs 7 lakh in case of the death of EPF members during the service.
EPF interest rate for FY 2024-25
For the fiscal year 2024-2025, the CBT announced that EPF members’ accounts to be credited with an annual rate of interest of 8.25% on their EPF accumulations. The Government of India would formally announce the interest rate via notification, after which EPFO would credit the rate to the accounts of the subscribers.
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