EPFO Update: New EDLI Changes To Benefit EPF Members, Here's How

The Employees’ Provident Fund Organisation (EPFO) recently made some key changes to its Employees' Deposit Linked Insurance (EDLI) scheme, which is expected to bring much relief to the thousands of employees and their families. The changes were approved by the Central Board of Trustees (CBT) during its 237th meeting under the chairmanship of Union Labour Minister Mansukh Mandaviya.

Here are the changes announced for the EDLI Scheme:

Minimum Insurance Even For Short Service Tenure: One of the most significant modifications to the EDLI scheme is the provision of a minimum insurance cover of Rs 50,000 for workers who pass away in their first year of service. Earlier, such employees’ families often struggled due to a lack of financial coverage. However, this change is expected to support over 5,000 families annually.

Coverage for Non-Contributory Periods: Previously, if an EPF member passed away after a few months of leaving their job, their family would lose out on EDLI benefits. Under the revised scheme, if an employee dies within six months of their last EPF contribution, their family will still be eligible for insurance benefits, provided their name has not been struck off from their company’s payroll.

“This update will provide financial relief for approximately 14,000 families every year,” the Ministry of Labour and Employment has noted.

Service Continuity Rules: So far, some employees have encountered difficulties in taking advantage of this insurance program, primarily due to its definition of a 'continued service'.The rules earlier could lead to loss of insurance benefits even if there was a small gap between jobs. However, the new update will allow up to two months of a gap between jobs while still considering the service as ‘continuous’. This update is expected to help over 1,000 families each year.

With all these updates, the government is working to provide better security to EPF members’ families and expects the relief to reach over 20,000 families every year.

Other Key Announcements

In its meeting, the CBT further discussed some key issues that are faced by pensioners and employees. It deliberated upon;

Higher Pension Processing: The retirement fund body has been working to implement the Supreme Court’s ruling on higher pension eligibility. The Board noted that so far, 72 per cent of the applications related to this have been processed, ensuring that pensioners who qualify for higher pension receive their due benefits.

Centralised Pension Payments System (CPPS): In January this year, the EPFO successfully implemented the CPPS across all Regional Offices (RO). Moving forward, this centralised system will be used to disburse pension payments via the ROs.

To ensure that the process is implemented smoothly, a Centralised Pension Disbursement Account (CPDA) is being maintained at the New Delhi Branch of SBI. This system is expected to reduce the grievances of pensioners who earlier had to wait for a long time for the transfer of their case details from one RO to another.

As per the official data, the CBT has been able to disburse pensions to 69.35 lakh pensioners in January 2025 through CPPS, which roughly amounted to Rs. 1,710 crore.

Lower Penalties for Late PF Payments: To reduce legal disputes and make compliance easier for businesses, the penalty for late provident fund remittances has been standardised at 1 per cent per month. Earlier, the rate of damages applicable ranged from 5 per cent for delays for two months and up to 25 per cent for delays beyond 6 months.

EPF Interest Rate for FY 2024-25: One of the most important updates has been EPFO’s announcement of the rate of interest on provident fund deposits for the financial year 2024-25. The EPFO has maintained the interest rate at 8.25 per cent. This interest rate will be officially notified by the government, following which EPFO will credit the interest to the EPF subscribers’ accounts.