The Employees’ Provident Fund Organisation (EPFO) issued an important circular on December 17. This decision can bring relief to the dependents or legal heirs of EPFO members who have passed away.
The circular also clearly states that weekends and holidays will not be treated as breaks in service when an employee changes jobs.
Small Gaps in Service Were Causing Claim Rejections
EPFO observed that many death claims under the Employees’ Deposit Linked Insurance (EDLI) scheme were either rejected or settled for a lower amount.
This mainly happened because of small gaps or breaks in service. In several cases, proper verification was also not done while the member was still employed before their death.
Weekend Gaps Will No Longer Affect EDLI Claims
EPFO found cases where an employee left a job on a Friday after completing more than 12 months of service and joined a new company on the following Monday.
Earlier, Saturday and Sunday were treated as a break in service, making the employee ineligible for EDLI benefits. The new circular aims to resolve this issue.
According to EPFO, service will be treated as continuous if the gap is only due to weekends, weekly offs, national holidays, gazetted holidays, or state holidays.
The only condition is that the exit date from the previous employer and the joining date with the new employer should differ only because of such holidays.
Job Changes with Up to 60 Days Gap Considered Continuous
EPFO has also clarified that job changes with a gap of up to 60 days will be treated as continuous service. This will help ensure that dependents do not lose EDLI benefits due to short breaks between jobs.
Minimum EDLI Payout Increased to ₹50,000
The minimum payout under the EDLI scheme has been increased to ₹50,000 for dependents or legal heirs. This amount will be paid even if the member has not completed 12 months of continuous service.
Benefit Available Even with Low PF Balance
The minimum EDLI benefit of ₹50,000 will be paid even if the member’s PF balance is less than this amount.
If the member passes away within six months of making their last PF contribution, the nominee will still be eligible for this benefit. The only requirement is that the member must be on the employer’s rolls at the time of death.
