What is EDLI Scheme? The Employees Deposit Linked Insurance Scheme is widely known as shortly EDLI Scheme. Briefly, this EDLI scheme is a group term insurance which gives life coverage to an Employee of an organization who is a member of the Employees Provident Fund (EPF) scheme. OR you can say in other words, in case if an EPF member dies his family members/ dependents get a lump-sum amount (up to 6 lakhs) through this EDLI scheme. When you learn more about the Employees Deposit Linked Insurance (EDLI) scheme then obviously you may curious to know, how the benefit amount of EDLI scheme is calculated?
Before jumping directly into the EDLI scheme benefit calculation, we have to learn about the following things which are the basement or we can say the benefit amount of EDLI Scheme depends on these parameters.
About EPF, EPS, EDLI contributions?
EPF Contribution is calculated on employee's BASIC Salary + Dearness Allowance (DA) if any, subjected to maximum Rs.15, 000/- per month. Both employer and Employee contribute to the EPF Account. EPS contribution is made by the employer and not from employee's salary or wage. Now come to the EDLI contribution. For your information, Employer contributes to the EDLI scheme on behalf of the EPF member.
What are the contribution rates of EPF, EPS, and EDLI ?Presently, with effect from 01.6.2018, the following rates of contributions are applied by Employer and Employee.
How is the EPF, EPS, EDLI contribution calculated with example? Per month each employee/ EPF member of an organization gets the following benefits to their account
(All above calculations are applicable on the basic salary + DA if any OR on the upper limits Rs.15, 000/- per month for both employee and employer)
For example :
Now let us see the EPF, EPS & EDLI monthly calculation in case of both Krishna & Ram based on their salary is drawn, as under:
In the case of Krishna, his monthly basic salary is Rs.14000/-(Basic + D.A) which is within the limit Rs.15,000/-
In the case of Ram, his monthly basic salary is Rs.20,000/-(Basic + D.A) which is above the limit Rs.15,000/-.Therefore
How is the benefit under EDLI Scheme calculated with example?Previously, the lump-sum assured in the event of an EPF member death was an amount between 1.5lacs and 3.6 lacs. Presently the amount increased to minimum Rs.2.5 lakhs and maximum Rs.6 lakhs. The Eligible claim amount under the EDLI scheme is calculated 30 times of the last basic salary which was drawn by the employee before death + 50% of the average balance in the member's account or amount during the last 12 months /entire period of his/her membership whichever is lower with an upper limit of Rs.1.5lakhs as a bonus.i.e EDLI scheme claim amount = 30 x basic salary + 50% of average EPF balance in the diseased account/ maximum Rs.1.5lakhs as bonus.
Here let us see in case of Krishna and Rama, based on their above salaries, How the Claim amount is calculated under EDLI scheme?
The same way let us calculate Rama'EDLI claim amount.
Note: Contents and calculations in this article are for readers knowledge purpose only and not for any claim reference. Always use circular/public notice reference from the official site for claim purpose. For EDLI Scheme benefit you can refer the circular link:
How to calculate 15000, 6 months working - please calculate the EDLI amount.
As per the EPFO circulars available in the link: https://epfindia.gov.in/site_docs/PDFs/Circulars/Y20172018/EDLI_Amendment_GSR_AssuranceBenefits_26694.pdf,
the EDLI Scheme benefit calculated is (The average monthly salary or wages paid to the deceased during the twelve months preceding the month in which he/she died x 30) + (50% of the average balance in the EPF Account).
As per the query, for 6 months working @ basic wages/salary Rs.15000/per month of a deceased employee and the EDLI Scheme benefit calculation is
(1) Rs. 7500 x 30 = 2,25,000/-
(2) Rs.14100x50% = 7050/- + interest if any
EDLI benefit Total (1) + (2) = Rs.2, 32,050/- appx.
Note: Minimum benefit shall be Rs.2,50,000/- as per the official circular of EPFO dtd. 21.02 2018 (as mentioned in the above link for your reference) and pension will be applicable to his/her dependents/nominees.
For your reference, the calculation is as under
(1)The deceased worked for 6 months @ basic paid salary of Rs.15,000/-.
Based on this amount, the calculation of the basic average monthly salary of 12 months is
Rs.15000x6)/12 months = 90000/12 this comes to Rs.7500 per month.
(2) Monthly EPF contribution of deceased is Rs.1800/- (12% of 15000) +
Monthly EPF contribution by company/ Employer is Rs.550.00 (3.67% of 15000/-)
Total contribution to the deceased employee's account =Rs.2350/- per month (Rs.1800/- + 550/-)
Therefore the average balance in EPF account of the deceased employee (for 6 months) is 2350x6months = Rs.14100 (50% of 14100= Rs.7050)
Note: The above calculation amount will change if the deceased employee's monthly paid salary differs/ less than Rs.15,000/- due to his absenteeism. In that case, you should calculate the amount accordingly by adding the 6 months actually paid salary (Basic salary + D.A if any)
(This calculation is only as per my understanding based on the EPFO circular. The final claim is applicable depending upon the EPFO/ EDLI scheme terms & conditions and their authorities. Because this kind of claim (below one year service) never came to my knowledge. But I personally handled my brother's claim, who was in service for more than 15 years. His dependents got the claim EDLI benefit of 6 lakhs without any problems.