Over 22 million subscribers or more than one-third of the total subscribers of the Employees’ Provident Fund Organisation benefited from Covid advance from their retirement savings in the three fiscal years starting from 2020-21 amounting to Rs 48,075.75 crore, shows the draft Annual Report 2022-23 of the EPFO.
EPFO has over 60 million subscribers and manages a corpus of more than Rs 18 lakh crore. Majority of the Covid claims were settled by the EPFO in three days to substantially reduce the financial shock on households since the outbreak of the pandemic.
As per the report, the retirement fund body disbursed Rs 17,106.17 crore in 2020-21 benefitting 6.92 million beneficiaries, Rs 19.126.29 crore in 2021-22 to 9.16 million beneficiaries and Rs 11,843.23 crore to 6.20 million beneficiaries in 2022-23.
The advance for Covid, which came into force with effect from March 28, 2020, saw 33 beneficiaries availing the advance in the four days of March 2020 amounting to Rs 0.06 crore.
The government had in March 2020 notified amendments to the EPF Scheme, 1952 to provide for non-refundable advance to EPF members not exceeding the basic wages and dearness allowances for three months or up to 75% of the amount standing to member’s credit in the EPF account, whichever is less, in the event of outbreak of epidemic or pandemic.
As a result, employees working in establishments and factories across entire India, who were members of the EPF Scheme, 1952, were eligible for the benefits of non-refundable advance under the amended scheme which came into effect from March 28, 2020.
According to the EPFO, the facility enabled members to cope during the tough phase of the pandemic.
The central board of trustees of the EPFO, a tripartite body under the chairmanship of labour minister, is the apex decision-making body of the retirement savings body. An approval from the central board of trustees is required for all reports of the EPFO, before they are formally accepted by the government.
Besides, the government has spent Rs 5000 crore to reimburse 24% of the employee and employer contribution (12% each) at the outbreak of the pandemic to ensure nobody suffered due to loss of continuity in the EPFO contribution.
However, this was applicable to establishments with up to 100 employees and 90% of whom were earning under Rs 15,000 monthly wage.
It is estimated that 8 million employees benefited from the initiative which incentivized about 0.4 million establishments to continue their employees on their payrolls despite disruption.