Employees’ Deposit-Linked Insurance Scheme,1976 :
(1) Section 6C of the Employees’ Provident Fund Act provides (Amendment Act of 1976), that the Central Government may, by notification in the Official Gazette, frame a scheme to be called the Employees’ Deposit-linked Insurance Scheme,1976 for the purpose of providing life insurance benefits to the employees of any establishment or class of establishments to which the Act applies [Section 6C(2)].
The Central Government under the Act (Employees’ Provident Funds and Miscellaneous Provisions Act, 1952) framed the Employees’ Deposit-linked Insurance Scheme, 1976 vide its Notification dated 28th July, 1976. The Insurance Scheme came into force on the 1st day of August, 1976.
(2) Soon after the framing of the above scheme, there was established a Deposit-linked Insurance Fund (called Insurance Fund). The employer shall pay into the fund from time to time in respect of his employees an amount not exceeding 1% of the aggregate of the basic wages, dearness allowance and retaining allowance (if any) as the Central Government may, by notification in the Official Gazette, specify [Section 6(2)].
(3) The employer shall also pay into the fund such further sum of money not exceeding 1/4th of the contribution which he is required to make as the Central Government may, from time to time, determine. This payment is required to be made to meet all the expenses in connection with the administration of the Employees’ Deposit-linked Insurance Scheme other than the expenses towards the cost of any benefits provided by or under that scheme [Section 6C(4)(a)].
(4) The Insurance Fund shall vest in the Central Board and be administered by it in such manner as may be specified in the Insurance Scheme [Section 6C(5)].
(5) The Insurance Scheme may provide for all or any of the matters specified in Schedule IV [Section 6C(7)].
(6) The Insurance Scheme may provide that any of its provisions shall take effect either prospectively or retrospectively on such date as may be specified in this behalf in that Scheme. [Section 6C(7)].
(7) The Central Government may by notification in the Official Gazette add to, amend or vary either prospectively or retrospectively, the Scheme (Section 7).
[Note: Under The Employees’ Deposit-linked Insurance Scheme the contribution payable by the employer and the Central government shall be limited to the amounts payable on a monthly pay of rupees fifteen thousand, dearness allowance, retaining allowance(if any) and cash value of food concession. The contribution by the employer shall be remitted by him together with administrative charges at such rate as the Central Government may fix from time to time under section 6(C) of the Act(at present the rate of contribution is @ 0.05 per cent. of the Insurance fund and its administrative charges @ 1.01%]
Notification No.G.S.R 334,dated August 29, 1997.
The Provident Fund claims complete in all respects submitted along with the requisite documents shall be settled and the benefit amount paid to the beneficiaries within 30 days from the date of its receipt by the Commissioner. If there is any deficiency in the claim, the same shall be recorded in writing and communicated to the applicant within 30 days from the date of receipt of such application. In case the Commissioner fails without sufficient cause to settle a claim complete in all respects within 30 days, the Commissioner shall be liable for the delay beyond the said period and penal interest at the rate of 12% per annum may be charged on the benefit amount and the same may be deducted from the salary of the Commissioner.
Certain amendments were made in this scheme in September, 1992 to provide for periodical submission of certain returns by the employer and for punishment for failure to comply with the same.
Employees’ Deposit Linked Insurance (Amendment) Scheme, 2010
As per the Notification No. G.S.R.523(E),dated 18th June,2010 amendment made in Employees’ Deposit Linked Insurance Scheme, 1976 by the Employees’ Deposit Linked Insurance (Amendment) Scheme,2010, by the Ministry of Labour and Employment in Paragraph 22, Sub-paragraph (1). This modified Employees’ Deposit Linked Insurance (Amendment) Scheme, 2010, Substituted the provision by-
“The Central Government amended the Employees’ Deposit Linked Insurance Scheme, 1976 by Employees’ Deposit Linked Insurance(Amendment) Scheme,2010. According to which on the death of an employee, who is member of the Fund or of a provident fund exempted under section 17 of the Act, the person entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations be paid an amount, equal to the average balance in the account of the deceased in the fund or a provident fund exempted under section 17 of the Act, as the case may be, during preceding twelve months or during the period of his membership, whichever is less, except where the average balance exceeds rupees fifty thousand, the amount payable shall be rupees fifty thousand plus 40% of the amount in excess of fifty thousand subject to a ceiling of Rupees one lakh.”
This above provision says that the EDLI amount is equal to the average balance of your PF in the last 12 months or the overall balance, whichever is less. But if the balance exceeds ` 50,000, your nominee will get ` 50,000 plus 40% of the excess balance up to a total of ` 1 lakh.
Employees’ Deposit Linked Insurance (Amendment) Scheme, 2011
As per the Notification No. G.S.R. 9(E),dated 8th January ,2011 , the Central Government revised the benefits provided to the employees under the Employees’ Deposit Linked Insurance(Amendment) Scheme,2010. Under the revised scheme, the benefit provided in case of death of an employee who was member of the Fund or of a Provident fund exempted under Section 17 of the Act at the time of the death, their family will get 20 times of the average wages of the last 12 months of the member (subject to a maximum of rupees six thousand five hundred)
Thus, according to the revised scheme, maximum benefits under the scheme will now be ` 1,30,000, as the wage ceiling upto which contribution can be paid under the scheme is ` 6500.
This amendment has changed the methodology of computation by introducing a new and additional method for computation of benefit that has to be paid to the nominee of the deceased along with existing method of computation i.e., as per the EDLI(Amendment) Scheme, 2010, which ever is higher.
Employees’ Deposit Linked Insurance (Amendment) Scheme, 2014
According to the Notification No. G.S.R. 610(E), dated 22nd August, 2014, as per the above amendment scheme, wage limit upto which contribution can be paid under the scheme has been revised from rupees six thousand five hundred to rupees fifteen thousand. And the benefit provided under the scheme shall be further increased by twenty 20% in additions to the benefits provided under paragraph 22 of the scheme, as the case may be.