The Employees’ Provident Fund Organisation (EPFO) has issued an important circular on December 17, bringing much-needed relief to employees’ families.
The new rules aim to prevent rejection of insurance claims due to minor job gaps and ensure better financial support for dependents after an employee’s death.
Why EPFO Was Rejecting Claims Earlier
EPFO found that many EDLI (Employees’ Deposit Linked Insurance) death claims were either rejected or paid at a lower amount.
The main reason was small breaks in service when employees changed jobs.
In some cases, even a weekend gap caused problems.
For example, if an employee left a job on Friday and joined a new company on Monday, Saturday and Sunday were counted as a break.
This made the employee ineligible for EDLI benefits, even after completing more than 12 months of service.
Weekends and Holidays Will Not Count as Breaks
EPFO has now clarified that weekends and holidays will not be treated as service breaks.
If an employee changes jobs and the gap is only due to weekly offs, national holidays, state holidays, or gazetted holidays, the service will be treated as continuous.
The condition is that the exit date from the old job and the joining date at the new job should differ only because of these holidays.
Job Gaps of Up to 60 Days Allowed
The new circular also states that job gaps of up to 60 days between two employments will be considered continuous service.
This change directly helps families whose claims were earlier rejected due to short employment gaps.
Minimum EDLI Payout Increased to Rs 50,000
EPFO has confirmed that the minimum EDLI payout is now Rs 50,000 for dependents or legal heirs.
This benefit will be given even if the employee had not completed 12 months of continuous service.
Importantly, this amount will be paid even if the PF balance is less than Rs 50,000.
Benefit Even If Death Occurs Soon After Job Change
If an EPFO member passes away within six months of the last PF contribution, the family will still receive the minimum EDLI benefit.
The only requirement is that the employee must be on the employer’s rolls at the time of death.
With these changes, EPFO aims to reduce claim rejections, simplify rules, and provide stronger financial protection to employees’ families during difficult times.
