Industry Odisha Bureau, Sept 17: The Union Cabinet has approved raising the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from Rs 15,000 to Rs 25,000 per month. The move is expected to bring more than 51 lakh additional employees under the EPFO social security framework.
Who will benefit from this?
Under the existing limit, employees earning more than Rs 15,000 a month are not automatically required to come under the EPF framework. With the new ceiling, workers earning between Rs 15,000 and Rs 25,000 a month will be brought under mandatory coverage, subject to applicable rules.
This will give eligible employees access to multiple things. These including, provident fund savings, pension benefits under the Employees’ Pension Scheme (EPS). Notably, this will also include insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI).
The EPFO wage ceiling, notably, was last increased in September 2014. Back then, it was raised from Rs 6,500 to Rs 15,000.
Why has the EPFO ceiling been increased?
The government estimates that the expanded coverage will require annual spending of around Rs 11,339 crore. This is in comparison with existing budgetary support of about Rs 10,250 crore. The estimated expenditure over five years is around Rs 56,696 crore.
The EPFO currently has around 7.98 crore contributing members across nearly 7.68 lakh establishments. The EPS provides pension benefits to around 82 lakh pensioners.
The Ministry of Labour and Employment and EPFO will now complete the required statutory and administrative steps before the revised ceiling takes effect.
