EPFO Pay-out Of Rs 48,000 Cr Covid Transfers To 2.2 Cr Beneficiaries

More than 22 million subscribers or about one-third of the total subscribers of the Employees' Provident Fund Organisation (EPFO) have benefitted from Covid funds from their retirement savings in the last three fiscal years starting from FY20 to FY23. These facts have been disclosed in the draft Annual Report 2022-23 of the EPFO. As per the report, the total advances amount to Rs 48,075.75 crore.

It may be noted that EPFO has more than 60 million subscribers. It manages a corpus of more than Rs 18 lakh crore. Majority of Covid claims have been settled by the EPFO in three days to potentially reduce the financial shock on households since the outbreak of the devastating pandemic.

As the report suggests, the retirement fund body has disbursed Rs 17,106.17 crore in FY21, benefitting 6.92 million beneficiaries. Similarly, Rs 19.126.29 crore has been disbursed in FY22 to 9.16 million subscribers and Rs 11,843.23 crore to 6.20 million subscribers in FY23.

The advances for Covid have seen 33 beneficiaries availing the advance in just four days of March 2020 amounting to Rs 0.06 crore, which has come into force starting on 28 March 2020.

The government notified amendments in March 2020 to the Employee Provident Fund(EPF) Scheme, 1952 to provide for non-refundable advance to EPF members which should not be up to 75 per cent of the amount standing to member's credit in the EPF account or exceed the basic wages and dearness allowances for three months, whichever is less, in the event of an outbreak of epidemic or pandemic.

Accordingly, employees working in establishments and factories pan-India, who were subscribers of the EPF Scheme 1952, were considered eligible for the benefits of non-refundable advance under the amended scheme which came into effect on 28 March, 2020.

According to the EPFO, the facility has enabled members to manage during the tough phase of Covid pandemic.

The central board of trustees of the EPFO which is a tripartite body chaired by labour minister, is the apex decision-making body for retirement savings. The central board of trustees is approval is required for all reports of the EPFO before they get formally accepted by the government.

Besides, the government has also spent a sum Rs 5000 crore to reimburse 24 per cent of the employee and employer contribution (12 per cent each) at the Covid pandemic outbreak to ensure that nobody suffers due to loss of continuity in the EPFO contribution.

However, this applied to establishments having up to 100 employees of which 90 per cent were earning under Rs 15,000 monthly wage.

As per the estimates, 8 million employees benefited from the initiative which incentivised about 0.4 million establishments to continue their employees on their payrolls despite disruption.