Savings remaining unclaimed in dormant Employees’ Provident Fund (EPF) accounts for seven years will be used to fund a new scheme for providing medical benefits to pensioners under the EPF scheme, according to Labour Ministry sources.
The move comes after a committee of secretaries, headed by Cabinet Secretary P.K. Sinha, recently directed the Labour Ministry to frame scheme for benefit of senior citizens who are PF subscribers from inoperative account funds, according to documents seen by The Hindu.
“With respect to the unclaimed money available in Provident Fund Organisations (Coal Miners PF, etc), the respective ministries may consider formulating and implementing schemes for the benefit of senior citizens belonging to the groups subscribing to the PF,” said the minutes of the meeting chaired by Mr.Sinha on February 10 with secretaries of a dozen central government ministries.
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Talks on scheme
The EPFO has already started discussions with the Employees’ State Insurance Corporation (ESIC) to frame a medical benefits scheme for pensioners under Employees’ Pension Scheme (EPS) of the EPFO.
Senior EPFO officials said the scheme will be contributory in nature with EPF pensioners contributing a portion of their income towards the medical scheme and rest flowing from inoperative accounts of the EPFO.
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Once the scheme is put in place, EPF pensioners will be able to avail medical facilities from a network of more than 1,400 dispensaries and 150 hospitals under ESIC across the country.
Under the ESI Act, workers drawing salary of up to ₹15,000 per month are entitled to medical benefits for treatment during sickness, maternity, disability and death due to injury during work. The Act applies to factories with 10 or more workers and also to shops, hotels, restaurants, cinemas and road transport undertakings.
Welfare fund
The government had framed a law last year wherein unclaimed money under EPF, Public Provident Fund and small saving schemes such as post office savings accounts for a period of seven years will be diverted to set up a senior citizens’ welfare fund.
The trade unions had strongly protested the move to divert EPF money for setting up a fund for the elderly. Following this, Labour Minister Bandaru Dattatreya wrote to Finance Ministry to not divert unclaimed EPF money for other purposes.
“The unclaimed EPF money will be diverted for EPF pensioners only. So, we are sure trade unions will not be concerned anymore,” said a senior Labour Ministry official.
EPF money becomes unclaimed after a subscriber doesn’t withdraw money after reaching 61 years of age. Accounts also become inoperative if persons settling abroad do not withdraw their money within three years.