EPFO: How to claim EDLI benefit up to 7 lakh as relief for deceased employee’s families
Labour Ministry has increased the death insurance benefits for subscribers of its employees’ deposit-linked Insurance (EDLI) scheme, at a time of surges in COVID-19 cases in India. In a gazette notification, EPFO said the minimum death insurance has been increased to Rs.2.5 lakh and the maximum to Rs.7 lakh, from the earlier limits of Rs.2 lakh and Rs.6 lakh, respectively.
Among the EPFO’s 5 crore active subscribers, over 20 lakh are EDLI subscribers. The scheme’s purpose is to ensure that the family gets financial assistance in case of the member’s death.
While the maximum limit has been raised from Rs.6 lakh to Rs.7 lakh, the minimum sum has been increased to Rs.2.5 lakh. These new limits are in effect for three years from 28 April. EDLI is one of the schemes formulated under the Employees’ Provident Fund and Miscellaneous Provisions Act (EPF and MP Act), 1952.
Features of Employees Deposit Linked Insurance Scheme
According Clear Tax, here are the essential elements of EDLI, applied uniformly to all beneficiaries under the policy:
- EDLI applies to all employees with a basic salary under Rs. 15,000/- per month. If the basic salary goes above Rs. 15,000 per month, the maximum benefit is capped at Rs. 6,00,000/-. With effect from 28.04.2021, the EPFO has increased the maximum benefit to Rs.7 lakh.
- There is no need for the employees to contribute to EDLI. Their contribution is required only for EPF.
- There is a bonus of Rs. 1,50,000/- available under the EDLI. With effect from 28.04.2021, the bonus is increased to Rs.2.5 lakh.
- The Ministry had increased the minimum amount of benefit to Rs.2.5 lakh in Feb 2018, which was valid for two years. The EPFO has extended this minimum amount of Rs.2.5 lakh with retrospective effect from 15th Feb 2020.
- Any organisation that has more than 20 employees needs to register for EPF. Therefore, any employee who has an EPF account automatically becomes eligible for the EDLI scheme.
- There are no exceptions to the insurance coverage provided by EDLI. It protects the insured person round the clock, all around the world.
- An employer can opt for another group insurance scheme, but the benefits offered must be equal to or more than those offered under EDLI.
- As per the provisions of the EDLI, the contribution of an employer must be 0.5% of the basic salary or a maximum of Rs. 75 per employee per month. If there is no other group insurance scheme, the maximum contribution is capped at Rs. 15,000/- per month.
- For all calculations under EDLI, the dearness allowance must be added to the basic salary.
Documents required for a payout under EDLI
To process the claim under EDLI, the following documents are to be submitted by the claimant: –
- Duly completed Form 5 IF
- Death Certificate of the insured person.
- Succession Certificate in case the legal heir files the claim.
- Guardianship Certificate if the claim is filed on behalf of a minor by a person other than the natural guardian.
- Copy of cancelled cheque for the account in which the payment is to be received.
How to claim the benefits under EDLI
The process to be followed by the nominee or claimant to receive the amount under EDLI is as follows:
- The benefits can be claimed by the nominee specified by the insured person. If no nominee was registered, then the family members or legal heirs can apply for the same.
- The deceased person should have been an active contributor to the EPF scheme at the time of his/her death.
- EDLI Form 5 IF has to be duly completed and submitted by the claimant.
- The claim form has to be signed and certified by the employer.
- If there is no employer or the signature of the employer cannot be obtained, the form must be attested by any of the following:
- Bank manager (in whose branch the account was maintained)
- Local MP or MLA
- Gazetted Officer
- Magistrate
- Member/Chairman/Secretary of Local Municipal Board
- Post Master or Sub-Postmaster
- Member of the regional committee of EPF or CBT
- The claimant must submit all the documents along with the completed form with the regional EPF Commissioner’s Office for processing of the claim.
- The claimant can also submit Form 20 (for EPF withdrawal claim) as well as Form 10C/D to claim all the benefits under the three schemes, EPF, EPS, and EDLI)
- Any additional documents required must be furnished at the earliest to process the claim.
Once all the documents are provided and the claim is accepted, the EPF commissioner must settle the claim within 30 days from the receipt of the claim. Otherwise, the claimant is entitled to interest @12% p.a. Till the date of actual disbursal.
