scorecardresearchEPFO’s social security net may include self-employed too: Report

EPFO’s social security net may include self-employed too: Report

Updated: 21 Apr 2022, 09:15 AM IST
TL;DR.

The retirement fund body’s central board of trustees to take final call on this

Government may come up with an entirely new scheme or include a provision in the existing EPFO scheme to allow self-employed workers to avail of PF benefits.

Government may come up with an entirely new scheme or include a provision in the existing EPFO scheme to allow self-employed workers to avail of PF benefits.

The government is contemplating allowing self-employed people to enrol under the Employees’ Provident Fund Organisation (EPFO) by contributing 10 percent of their income to the provident fund body each month, reported The Economic Times.

“The proposal, being deliberated upon by the ad-hoc committee on EPFO expansion, is expected to benefit 15 million self-employed people in the country,” a person familiar with the deliberations said. 

The decision on the proposal will be taken by the EPFO’s central board of trustees. The person cited earlier said the government may come up with an entirely new scheme or include a provision in the existing EPFO scheme that permits self-employed workers to avail of the benefits of provident fund and pension, wrote Economic Times.

The rate of contribution, however, could be subject to an income ceiling. Under the existing EPFO scheme, wages for the computation of provident fund and pension are subject to a ceiling of 15,000 per month.

Even the returns on such deposits from individuals or the self-employed may vary from the returns on EPFO investments as on date. The EPFO had announced an interest rate of 8. 1 percent for 2021-22.

The Social Security Code empowers the government to frame a new scheme to provide social security to an unorganised worker, including the self-employed, and shall entrust the administration of such scheme to the EPFO.

However, if the implementation of the Code is delayed, the government may even consider tweaking the EPF Act, 1952, which mandates an employee-employer relationship wherein both employee and the employer contribute 12 percent each to the provident fund account of the beneficiary.

Retirement fund body EPFO has around 60 million subscribers and manages a corpus of over 12 lakh crore. EPFO beneficiaries are entitled to provident fund benefits under the EPF scheme, pension benefits under the EPS-95 scheme, and the insurance benefits under the Employees’ Deposit Linked Insurance Scheme.

First Published: 21 Apr 2022, 09:15 AM IST