Context
- Recently, The Union Cabinet has approved an increase in the wage ceiling for mandatory EPFO coverage from ₹15,000 to ₹25,000 per month. The ceiling was last revised to ₹15,000 in September 2014.
What Has Changed?
| Earlier | New |
| ₹15,000/month wage ceiling | ₹25,000/month |
| Employees above the ceiling were not automatically covered | Employees earning up to ₹25,000 can come under mandatory EPFO coverage, subject to applicable provisions |
| Narrower coverage | 51 lakh+ additional employees expected to be covered |
EPFO and Its Three Key Schemes
- The expansion will extend access, under applicable scheme provisions, to three major components of EPFO social security:
- Employees’ Provident Fund (EPF): Provides accumulated retirement savings to employees.
- Employees’ Pension Scheme (EPS), 1995: Provides pension-related benefits to eligible members.
- Employees’ Deposit Linked Insurance Scheme (EDLI), 1976: Provides insurance benefits linked to the employee’s EPF membership.
- EPFO administers these schemes under the Ministry of Labour and Employment.
Financial Implication
- The decision is estimated to bring over 51 lakh additional employees under mandatory EPFO coverage.
- The annual Government outgo is estimated at around ₹11,339 crores, compared with existing annual budgetary support of about ₹10,250 crore.
- The measure is also expected to strengthen formalisation of employment and wider social-security coverage.
| Important CTC from this article for UPSC: EPFO |
Q. Consider the following statements regarding the Employees’ Provident Fund Organisation (EPFO):
1. The wage ceiling for mandatory EPFO coverage has been increased from ₹15,000 to ₹25,000 per month.
2. The Employees’ Pension Scheme (EPS) and Employees’ Deposit Linked Insurance Scheme (EDLI) are administered by the EPFO.
3. EPFO functions under the Ministry of Finance.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: (a) 1 and 2 only
• Statement 1 is correct: The wage ceiling for mandatory EPFO coverage has been raised from ₹15,000 to ₹25,000 per month.
• Statement 2 is correct: EPFO administers EPF, EPS and EDLI.
• Statement 3 is incorrect: EPFO functions under the Ministry of Labour and Employment, not the Ministry of Finance.