1. EPF wage ceiling: Finance Ministry yet to decide on hike to Rs 25,000 per month

EPF wage ceiling: Finance Ministry yet to decide on hike to Rs 25,000 per month

The finance ministry is yet to take a call on the labour ministry’s proposal to raise the wage ceiling for mandatory EPF cover to Rs 25,000 per month.

By: | Published: June 28, 2017 6:53 AM
EPF wage ceiling, EPF wage, Finance Ministry, Employees Pension Scheme, EDLI handling fee, State Insurance Corporation, EPFI While employees contribute 12% of the basic pay to EPF, the employer contributes 8.33% towards EPS 3.67% to the EPF itself. The government pays 1.16% in addition towards EPS. (Image: PTI)

The finance ministry is yet to take a call on the labour ministry’s proposal to raise the wage ceiling for mandatory EPF cover to Rs 25,000 per month. This is mainly because approving it will cost the exchequer Rs 750 crore in addition to around Rs 2,000 crore now by way of the government’s contribution towards the Employees Pension Scheme (EPS) per subscriber at 1.16% of the wages.
“The labour ministry has already taken up the matter with the finance ministry. Unless they give clearance, it can’t be raised,” a senior government official said. Under the current law, it is mandatory for units employing 20 or more people to provide EPF benefits to workers. While employees contribute 12% of the basic pay to EPF, the employer contributes 8.33% towards EPS 3.67% to the EPF itself. The government pays 1.16% in addition towards EPS.

Employers also pay 0.5% towards EDLI, 0.65% as EPF administrative charges and 0.01% as EDLI handling fee, taking the total contribution to 13.61%. The government also provides grant to the tune of Rs 3,000 crore per annum towards payment of minimum pensions of Rs 1,000 per month. The Central Board of Trustees (CBT), the highest decision-making body of the Employees’ Provident Fund Organisation (EPFO), gave its go-ahead for the proposal to raise the wage ceiling for mandatory EPF cover from `15,000 now for organised-sector workers long ago. Following this, the labour ministry sent the proposal to the finance ministry for its approval which would require to be notified by the government subsequently. Sources said if implemented, it would raise the number of active EPF subscribers by around 50 lakh to 5 crore.

The EPFO’s wage threshold was last raised in November 2014 from Rs 6,500 a month. The wage threshold for medical/cash and insurance benefits under the Employees’ State Insurance Corporation (ESIC) was raised last year to Rs 21,000 per month, from Rs 15,000 previously.

ESIC, another social security venture of the government, had in September last year raised the threshold to Rs 21,000 per insured persons in sync with the hike in minimum wages. “ESIC is different. There the government does not give anything in grant,” said the source, adding that in ESIC the contribution is also less at 6.75-1.75% by the employer and 4.75% by the employer. “But for EPFO, the contribution is 24%. So, raising the threshold limit for EPFI is not easy, plus the government has also provided grant,” the source said.

  1. Chellaiah Gnanapandithan
    Oct 24, 2017 at 8:06 am
    GOVT OF INDIA SHOULD TAKE DECISION ON TAKING STATUTORY WAGES CEILING AS RS 25000./IT WILL BE WELCOMED BY EPF MEMBERS BY ALL OVER INDIA BESIDES TAKING THIS DECISION THE MINIMUM PENSION TO EPF SCHEMES MUST BE FIXED AT RS 6500/PLUS USUAL ALLOWANCES AS APPLICABLE TO CENTRAL GOVT EMPLOYEES BY USING HUGE FUND AVAILABLE WITH EPFO AND THIS WILL ONLY HELP TO THE THE EPF PENSIONERS WHO WERE LIVING WITH MINIMUM PENSION OF RS 1000/ WITH MUCH MORE DIFFICULTIES IN THEIR LIFE ..
    Reply
    1. Pankaj Dasgupta
      Jul 15, 2017 at 12:39 pm
      We the EPS 1995 Pensioners,had seen a ray of light ,when in some media,on 31st March/1st April 2017 , it was reported that EPS 1995 Pensioners would be offered Medical benefit from ESIC.after this reporting We were really happy.,So far We understand,No further development on the issue has taken place till date.at least nothing has been reported.We are eagerly waiting for the scheme.as We are finding it very difficult to meet Medical expenses.May I Request, if any person can inform us Present status of the said scheme.
      Reply
      1. Gaurav Kumar Agarwal
        Jun 29, 2017 at 2:32 pm
        As per notification issued by government S.O.827(E) dt.15th March, 2017 and S.O. 828(E) dt.15th March 2017......rate of PF contribution is 8.33 3.67 0.65 0.5....I think u have mentioned incorrect rate of PF 13.61 instead of 13.15 it should be correct. New rate 13.15 is effective from 01.04.2017.
        Reply
        1. A
          Anil Kumar Mohapatra
          Jun 28, 2017 at 9:51 pm
          Dear Mr.Sarath,You have written the employer side of is 13.61 in total but it is wrong.The employer side of is 13.16 .That is EPS-8.33 ,EPF-3.67 ,ADMIN CHARGE-.66 ,EDLI CHARGE-.50 .TOTAL.13.16 .So rectify at your end. Regards, Anil Kumar Mohapatra 08817425050 Reply
          Reply
          1. A
            Anil Kumar Mohapatra
            Jun 28, 2017 at 9:46 pm
            Dear Mr.Sarath,You have written the employer side of is 13.61 in total but it is wrong.The employer side of is 13.36 .That is EPS-8.33 ,EPF-3.67 ,ADMIN CHARGE-.66 ,EDLI CHARGE-.50 .TOTAL.13.16 .So rectify at your end. Regards, Anil Kumar Mohapatra 08817425050
            Reply
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