EPFO EDLI Update: Weekends & holidays count as continuous service; minimum payout to nominees increased to Rs 50,000

EPFO EDLI Update

The Employees’ Provident Fund Organisation (EPFO) issued a circular on Wednesday (December 17), which could provide relief to dependents or legal heirs upon the death of a member. It also clarified that

Weekends or any other holidays will not be treated as a break in service when switching between jobs.

According to EPFO, the government-run pension regulator observed that many Employees Deposit Linked Insurance (EDLI) death claims were rejected or settled for a reduced amount because of a minor gap, or breaks in service, and that the authorities did not take due assessment before the member’s death while in service.

It cited an instance wherein an employee who had completed more than 12 months of total service left the establishment on Friday and joined another establishment on Monday. In this case, Saturday and Sunday were treated as a break in service, leading to the denial of eligibility for EDLI benefits.

Hence, in a move to remove such anomalies relating to break in service that lead to denial of EDLI benefits, the EPFO has introduced a circular stating —

“Continuous spells of service immediately followed by Saturdays, Sundays, or any declared weekly off in the last or present establishment, national holiday, gazetted holiday, state holiday, and restricted holidays are to be treated as part of continuous service only, provided the date of exit from one establishment and the date of joining in the next establishment covered under the EPF & MP Act, 1952 are separated only by such offs/holidays.

“In other words, the Saturdays, Sundays, or any declared weekly off in the last or present establishment, national holiday, gazetted holiday, state holiday, and restricted holiday shall not be treated as a break in service, and the service shall be treated as continuous,” EPFO circular issued on December 17 stated.

Furthermore, job changes with gaps up to 60 days will now be treated as continuous service.

The EPFO has also increased the minimum payout benefit to the dependent and legal heirs to Rs 50,000 under the EDLI scheme, even if the member did not complete 12 months of continuous service. Such a benefit will be provided even if the average PF balance of the member is less than Rs 50,000.

The minimum EDLI payout will apply even if the member’s death occurs within six months of their last PF contribution, provided they are still on the employer’s rolls.