EPFO: EDLI insurance claims: EPFO clarifies on assurance benefits payable to Employees’ Deposit Linked Insurance Scheme beneficiaries

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In October 2022, the Employees’ Provident Fund Organization (EPFO) had issued a clarification on the insurance claims under EDLI. It had stated that it has received complaints under the Employees’ Deposit Linked Insurance Scheme (EDLI) where an employee has passed away while on the job and some offices are rejecting the claims on the grounds that the contribution was not received in the prior few days.

According to the latest EPFO circular dated February 3, 2023, “Please refer to directions/guidelines issued vide H.O Circular dt 18.10.2022 on admissibility of benefits payable to the beneficiaries of EDLI Scheme. However, it seems that directions/guidelines are still not being followed as grievances RTIs on the subject so reflect.”

In the latest circular, the provisions of MAP (11-B) and EDLI Scheme are once again reiterated:

“MAP II(B) Para 2.2.1 The Employees’ Deposit Linked Insurance Scheme,1976 provides for payment of ‘Assurance Benefit’. The assurance benefit is payable on death of the member, while in service”. The quantum of assurance benefit is linked to the average balance in the Provident Fund Account of the employee.”

“MAP II(B) Para 2.2.7 in cases, where an employee/ member was on leave without wages (consequently no contribution was payable by the employer) or absent for any other reason and expired during that period, the Assurance benefit is admissible irrespective of the fact that no contribution was paid by the employer, provided he was on the muster rolls of the establishment on the day of death and satisfied the prescribed conditions”

Further Para 22(3) of EDLI Scheme states” On the death of an employee, who is a member of the Fund or of a provident fund exempted under Section 17 of the Act, as the case may be, and was in employment for a continuouS period of twelve months, preceding the month in which he died, the persons entitled to receive the provident fund acCumulations of the deceased shall in addition to such accumulations to be paíd an amount equal to
the average monthly wages drawn (subject to a maximum of fifteen thousand rupees) during the twelve months preceding the month in which he died, mutiplied by thirty five times pltus fifty percent of the average balance in the account of the deceased in the fund or of a provident fund exempted under Section 17 of the Act or under Paragraph 27 or 27A of the Employees Provident Funds Scheme, 1952, as the case may be, during the preceding twelve months subject to a ceiling of one lakh and seventy five thousand rupees;
Provided that the assurance benefit shall not be less than two lakh and firty thousand rupees; Provided further that the assurance benefit shall not exceed seven lakh rupees;] (i) the amount of benefit under sub paragraph (1), whichever is higher.”

In the aforementioned context, it is emphasised once more that RTIs, references, and complaints have been received stating that some offices are rejecting claims even in cases where an employee has passed away while still on the job, claiming that the contribution was not received in the preceding few days and as a result, the EDLI benefits are not payable on account of such NCP days.

According to the EPFO circular, “It is also to be noted that when the member dies after leaving employment he/she ceases to be an “employee” as defined in Section 2(f) read in conjunction with Section 6C (1) of the Act in an establishment covered under the Act the condition for release of EDLI benefits ceases to be in operation and the benefits would not be admissible.”

“Due verification shall be done but it should be done within 7 days and the
family members should not be harassed. In cases where employer states that the
member is on the muster rolls and the EO says otherwise, the reason why the employer
version is not acceptable to us should be clearly listed out and examined at Office,” the latest EPFO circular stated further.

What is EDLI
The EPFO (Employees’ Provident Fund Organisation) offers the EDLI scheme to private sector salaried employees. This system works in tandem with the EPF and the Employees’ Pension Scheme (EPS). The benefit amount is determined by the employee’s last drawn salary.

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