The Employees’ Provident Fund Organisation (EPFO) has issued a new circular that brings major relief to employees’ families.
Announced on December 17, the update aims to prevent unfair rejection of death-related claims and clarify how service breaks are calculated when changing jobs.
This move is especially important for dependents and legal heirs seeking benefits under the Employees’ Deposit Linked Insurance (EDLI) scheme.
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Why Many EDLI Claims Were Getting Rejected
EPFO found that several EDLI death claims were either rejected or paid at lower amounts because of small gaps in service.
In many cases, these gaps happened when employees switched jobs.
For example, if an employee left one company on a Friday and joined another on the following Monday, Saturday and Sunday were wrongly counted as a break in service.
Because of this, the employee was considered ineligible for EDLI benefits, even after completing more than 12 months of service.
Weekends and Holidays Will Not Count as Service Breaks
The new EPFO circular clearly states that weekends, weekly offs, and holidays will not be treated as breaks in service.
If an employee exits one EPF-covered organisation and joins another, and the only gap is due to Saturdays, Sundays, or official holidays, the service will be treated as continuous.
This rule applies as long as the difference in joining and exit dates is only because of such holidays.
Job Change Gap of Up to 60 Days Allowed
EPFO has also relaxed rules around job changes.
A gap of up to 60 days between jobs will now be considered continuous service for EDLI eligibility.
This change ensures that employees who briefly remain unemployed while switching jobs do not lose insurance benefits meant for their families.
Minimum EDLI Payout Increased to Rs 50,000
Another key update is the minimum EDLI payout, which has been fixed at Rs 50,000 for dependents or legal heirs.
This benefit will be given even if the employee did not complete 12 months of continuous service.
Benefit Even If PF Balance Is Low
The minimum EDLI amount of Rs 50,000 will be paid even if the member’s PF balance is less than that amount.
If an employee passes away within six months of their last PF contribution, the nominee will still be eligible for this benefit.
The only condition is that the employee must have been on the employer’s rolls at the time of death.
With these changes, EPFO has made the system more employee-friendly and ensured that families are not denied benefits due to technical gaps or holidays.