Explained: New benefits for families of Employees Provident Fund and ESIC subscribers amid Covid-19

By: |
May 31, 2021 11:04 AM

In order to provide relief to workers amid Covid-19 pandemic, the Ministry of Labour and Employment has announced additional benefits for families of insured persons covered under the ESIC and EPFO's EDLI schemes.

Rewpresentative image/Pixabay

In order to provide relief to workers amid Covid-19 pandemic, the Ministry of Labour and Employment has announced additional benefits for families of insured persons covered under the ESIC and EPFO’s EDLI schemes. The Government has decided to provide pension to dependents of insured persons, covered under the ESIC scheme, who died due to COVID-19. A hike in maximum sum assured under the Employees’ Deposit Linked Insurance Scheme (EDLI) under EPFO to Rs 7 lakh from Rs 6 lakh has also been announced.

“The Ministry of Labour and Employment has announced additional benefits for workers through ESIC and EPFO schemes to address the fear and anxiety of workers about well-being of their family members due to increase in incidences of death due to COVID -19 pandemic. Enhanced social security is sought to be provided to the workers without any additional cost to the employer,” the Ministry of Labour and Employment said in a statement.

Who will benefit?

“The additional social security benefits announced by Government are available for those who are covered under the Employee’ State Insurance Act 1948 (ESI Act) and Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (EPF Act). Employees whose monthly wages do not exceed Rs 21,000 are eligible to be covered under the ESI Act; monthly wage not exceeding Rs 15000 makes an employee eligible for coverage (unless already covered before monthly wage exceeded Rs 15000 and has not withdrawn membership) under EPFO,” said Pooja Ramchandani, Partner, Shardul Amarchand Mangaldas & Co.

What’s new for insured persons under ESIC?

After death or disablement of the insured persons (IPs) under ESIC due to employment injury, a pension equivalent to 90 per cent of average daily wage drawn by the worker is available to the spouse and widowed mother for life long and for children till they attain the age of 25 years. For the female child, this benefit is available till her marriage.

The contribution to the ESIC fund is made by both employer and employee to avail the sickness and death benefits prescribed under the ESI Act. The Government has expanded the scope of availing dependent benefits to include covid deaths.”

“Now, the dependent benefit has been extended for death due to covid subject to the conditions that the insured person has been registered on the ESIC portal three months prior to diagnosis of covid and contributions for at least 78 days has been paid or payable during one year preceding the diagnosis,” said Ramchandani.

The above announcement will be effective for two years from 24th March 2020.

Benefit under EPFO

According to the rules of EPFO’s Employees’ Deposit Linked Insurance (EDLI) Scheme, all surviving dependent family members of the members are eligible to avail benefits of EDLI in case of death in harness of the member. Currently, the benefits extended in case of death of a worker are no requirement of minimum service for payment of Gratuity, family pension is paid as per provisions under EPF & MP Act. Sickness benefit of 70 per cent of wages for 91 days in a year is paid if the worker falls sick and fail to attend office.

Through a notification, the amount of maximum benefit has been increased from Rs 6 lakhs to Rs 7 lakhs to the family members of the deceased employee covered under EDLI. A minimum assurance benefit of Rs 2.5 lakh has been provided to eligible family members of deceased employee, who was a member for a continuous period of 12 months in one or more establishments preceding his death in place of existing provision of continuous employment in the same establishment for 12 months.

“The insurance benefit under the Employees’ Deposit-Linked Insurance Scheme framed under the EPF Act was increased to Rs 7 lakh from Rs 6 lakh, to be availed by families of members who succumbed to covid. This is a beneficial change not only because of increase in the quantum of benefit but also because it can be availed irrespective of change in employment, thereby will render financial support to the families of the deceased member,” said Ramchandani.

“However, for those who are not covered under ESI Act and EPF Act and have no other means of financial support, their plight continues,” she added.

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