EPF gives every member life insurance of Rs 7 Lakh Which is known as Employee Deposit Linked Insurance (EDLI).
Today we will learn about
Eligibility
Premium
Benefits
How to claim.
| What Is EDLI And How to Claim EDLI? |
EDLI full form is Employee Deposit Linked Insurance Scheme. This means this insurance is linked with your PF Deposit It is one of the EPFO's 3 schemes Rest two I guess you may know Employee Provident Fund Scheme (EPF) and Employee Pension Scheme (EPS) This scheme started in 1976. The major changes are done in 2016, 2018, and 2020. Which notification came on 28th April 2021. This is a Group Insurance Scheme. This means whatever amount of PF members are there like in crores. Made group of them and ensured in this scheme. This means all the PF members get coverage. First thing,
| Who pays the premium of EDLI? |
Don't worry, If you are an employee, then you have to pay zero Premium. Because it's complete Premium is paid by your employer. If you are a PF member, your employer will pay an EDLI premium monthly on your behalf. How much is Premium? Premium is 0.5% of PF wages.PF wage is calculated from basic and DA. Suppose Your wage is Rs. 10,000/- Then the premium for that month Will be 0.5% of 10,000 (Rs 50) which will be paid by your employer This calculation is not done for an individual employee. EDLI Calculation is done on the sum of PF Wage of all employees The limit of EDLI Calculation is up to Rs 15,000Assume, you are contributing PF for Rs 50,000 But EDLI Contribution will be Rs 75 per employee on a maximum of Rs 15,000 If you are reading this article as an employer or HR.
How does EDLI work from the perspective of the company?
Apart from this, we have taught many concepts in the A-Z of PF Compliance Course The App and the website link are given in the description for you As I told you you are eligible for EDLI if you are a PF Member You are covered in this scheme till the date you are working in the company Some limited companies have their own Group Insurance to give better benefits from EDLI They can be exempted from EDLI but such companies are very few. Many consultants and HRs have one more misconception, That there is a minimum limit of 12 months for consuming the benefits of EDLI. This means you should have continuous service of 12 months There is no such condition. But if your service is less than 12 months Then your benefit will drastically decrease and you will get very fewer benefits Major benefits can be received only after 12 months But you can get some benefits before 12 months. we will learn that Its coverage is complete. It's not like that It will be claimed only if the PF Member dies due to a work-related accident Work-related death, non-work related, illness, accidental, etc. Whatever reason is there for death The family can claim the benefits Before calculating EDLI, You should know some points
First, is the service more than 12 months or less? And what is the date of death? Is it before 15th February 2020 or after it?
The calculation will be different in both cases So, first, let's understand if it's more than 12 months. So, this calculation is governed by the EDLI scheme section 22 paragraph 3. Before 15th February 2020, the calculation will be like this:
EDLI Amount = 30X of average monthly wage (Average of last 12 months) + 50% of the average PF balance in the last 12 months. subject to a maximum of 1.5 lakh.
Similarly, in wage also you have to subject like:
If the contribution is Rs 50,000 per month then also it will be restricted to Rs. 15,000/-. Then what will be the maximum limit?
If your average wage is Rs. 15,000/-30X of 15,000 = 4.5 Lakh + 50% of the average PF balance,
which maximum can be 1,50,000.
So, the maximum receivable EDLI benefit before February 2020 is Rs. 6 Lakh
Suppose the employee's average salary is Rs. 10,000 And his average PF balance is Rs. 1 lakh.
Then 10,000*30 = 3 Lakh Rupees + 50% of Rs. 1 lakh which is Rs. 50,000
So, in this case, the EDL's benefit is Rs. 3.5 Lakh Your service must have 12 months of service in a single company before Feb 2020 If you worked 5 months for one company and 7 months for another. Even though you worked continuously. You were not eligible for EDLI benefits. There have been many improvements after February 2020 The limit of 6 lakh has also increased to 7 lakh And there are many changes in calculation also. So, after 15th February, the formula: 35 * average monthly PF wages Again restricted up to Rs 15,000 Ceilings. Plus 50% of the average PF balance Here, the ceiling limit increased from 1.5 lakh to 1.75 Lakh The maximum account will be 35 times.
Assume, all Rs. 15,000 contribution is made, plus 50% average balance limit is Rs. 1,75,000.
So, Rs 5.25 Lakh + 1.75 Lakh = 7 Lakh Again let's repeat the same example
If the salary is 10,000 Rupees and the average balance is 1 Lakh rupees,
10,000 * 35 = 3.5 Lakh + 50% of average balance(1 Lakh)=50,000
So, EDLI benefit will be 4 Lakh which was 3.5 Lakh before Also, this is the change in this amendment that if your 12 months service is in multiple establishments instead of 1 establishment Then also you can take benefits Now, let's discuss the situation when services in less than 12 months, In this case, benefits will be very less, but you will get few benefits Which are covered under the EDLI section 22, paragraphs 1 and 4 So in this particular case, the formula will be: average PF balance up to maximum 50,000 Plus 40% of the amount over 50,000
(subject to a ceiling of 1 Lakh)
Then you have to multiply the whole amount by 1.2 because you will get 20% extra as per paragraph number 4. This seems very complicated, let's understand with an example. First of all, assume that if the service is less than 12 years Then your average balance will be more than Rs. 50,000 in very few cases.
How To Calculate Contribution In EPFO EDLI?
Because generally if you are contributing on Rs. 15,000 Then you are contributing Rs. 1800 per month, 1800 Rupees per month is contributed by the employee Plus 367 Rupees is being contributed in PF from the employer share So employees can deposit a maximum of Rs 23,837 in 8 months Let's find its average by dividing all months' balance by 11 Then the average will be very less. Suppose the average PF balance is Rs 15K So 1.2 times 15,000 = 18,000 And it is your benefit
By the way, In this particular case, theoretically, a total benefit of up to 1.8 lakhs can be made. but that is a theoretical limit. Assuming that Rs 50,000 from the first condition and 1 lakh from the second condition And then multiplied by 1.2 then it is 1.8 Lakh Rupees
But this is possible only when the employee contributes PF on a huge salary. Then only we can get such a high balance Otherwise, we can't get such a huge balance in the continuous service of fewer than 12 months. Another condition can be that an employee did a job And he joined another company after a gap But during the gap period, there was a decent PF balance in his account Which he had not withdrawn. Then the employee can get the maximum 1.8 Lakh benefit on up to 12 months of continuous service Who will get this amount? If the PF member has filed a nomination,
Then nominee will get the benefit and no questions will be asked That's why it is important to file an online nominee if not done yet.
I have seen many cases in which the employee had not filed his nominee and if unfortunately, a member dies then the family has to face many problems legal heirs will get money if the nominee was not declared but it can be difficult to prove especially if the member was unmarried Many questions have to be faced and also has to get a court certificate the legal heir is a minor, the money will be transferred to his/her guardian
How to claim EDLI 2022?
We can claim online and offline in both modes you can claim online only if the nomination form is filled the nomination form is filed then go UN Member portal You will find a link like "Death Claim...."Visit Oficial Website"
Login using the UAN Number and nominee Aadhar details
You will be logged in after Aadhar OTP verification
The list of all the needed documents can be found on the right-hand side
Like Death certificates, Cancelled cheques, etc.
Keep all these documents' PDF files ready
As you have to upload all these while filing the form First and very important point for all the employers and HRs.
Enter "Death in Service" and "Death Away from service" in the reason
If the death is due to a work-related accident then enter "Death in Service" Otherwise, enter "Death Away From Service"
If the reason is not Death then no online benefits can be claimed And you will face many problems offline too
Fill out the form. Select the relevant options and click on submit. In the E-Sign option, you can authenticate it through Aadhar You can see the progress report. Generally, it takes 30 days
If the nomination form is not filled and you are applying offline Then you have to download the Composite Death Claim form (Link in description)
The list of all needed self-attested documents can be found below Forms and all the documents should be with the seal and sign of your employer Then submit it to the local PF Office If that company is closed in any case Then you can take the signature of Gazzeted officer or bank manager with application And you can submit it.
Can I Claim EDLI Offline?
As I told you if there is not any form error, whether it is online or offline Then PF Office has to settle your claim within 30 days Otherwise, they have to pay 12% interest on that amount to you There are 3 ways if you don't get any response after correct form filing.
The first step is to file a Grievance by visiting the PF grievance portal.
Secondly, you can file an RTI to get the status of your application.
Third, you can complain on PM Complaint Portal for this case Hopefully, you will get a response in the first step So, so you will rarely use steps 2 or 3 There are some important points for employees and for employers & HRs Also As an employee, file your nomination form Secondly, tell your family members about EDLI benefits.
Third, write down your UAN Number at any safe place And tell this to at least 1 or 2 family members about It is If you have life insurance and your family is unaware of it Then how will they claim benefits? That's why tell your family members that life insurance is linked with UAN A very important point for employers. If an employee dies in your company while working Then don't put Cessation as his exit reason Enter only "Death in Service" or "Death Away From Service" I have seen many such practical cases When an employee has an accident or long illness in service or out of service,
How to Claim EDLI if the employer is absent from the job?
So, the employer has been absent from the job for the last few days and he is hospitalized Suppose he dies in hospital due to some reason HRs or Employers usually make a mistake here Suppose the employer is not attending office for the last 15 days Then they show it 'left' from the date of 15 days before No EDLI benefit will be available in this case. So, the better recommendation is that If the employee is employed in your company but not able to come office Then consider it as ABSENT and fill out his PF challan as 'nil' for that time If you put his reason of exit as "Death In Service" or "Death Away From Service" Then the employee will definitely get the benefit
Although, PF Department can demand a lot of documents in this case Like payroll, pay-slips, salary register, etc. So, prove that the employee was unable to attend work for last some days But he was employed and he was absent and died due to some reasons. In that case, benefits can be claimed.
Be safe.
Jai Hind Jai Bharat