New Changes in the Employees’ Deposit-Linked Insurance Scheme: Death Benefits and Coverage for Part-Time Workers

The Ministry of Labour and Employment, through a notification dated November 18, 2024, has made amendments to the Employees’ Deposit-Linked Insurance Scheme, 1976 under the powers conferred by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

The amended scheme is referred to as the Employees’ Deposit-Linked Insurance (Second Amendment) Scheme 2024.

Key Changes in the Scheme

The major change is related to the benefit amount payable to the nominees in case of the death of a member. The details of the amendment are as follows:

1. New Provision for Death Benefits:

In the case of the death of an employee who has been a member of the Provident Fund or a provident fund exempted under section 17 of the Act, and who has been in continuous employment for a period of twelve months preceding the month of death, the following will apply:

The nominee(s) will be entitled to receive the Provident Fund accumulations of the deceased member, along with an additional amount calculated as:

1. Thirty-five times the average monthly wages drawn by the employee (subject to a ceiling of ₹15,000), during the twelve months preceding the month of death.
2. Fifty percent of the average balance in the employee’s provident fund account (or an exempted provident fund account) during the preceding twelve months, subject to a ceiling of ₹1,75,000.
3. Minimum Benefit: The insurance benefit provided will not be less than ₹2,50,000.
4. Maximum Benefit: The insurance benefit will not exceed ₹7,00,000.

2. Provision for Part-Time Employees:

In the case of part-time employees who are members of the Provident Fund or an exempted provident fund under section 17 of the Act, and have worked in more than one establishment for a continuous period of twelve months preceding the month of death, the benefit will be calculated based on the aggregate average wages from all the establishments where the employee has been working for more than twelve months, subject to the ₹15,000 wage ceiling.

Effective Date : The new scheme will come into force from April 28, 2024.