Cabinet to approve pension contributions advances announced by the FM

Advertisement
Cabinet to approve pension contributions advances announced by the FM
Union cabinet may give post facto approval to the proposal of EPF contribution by the government announced under PM Garib Kalyan Yojana by Finance Minister Nirmala Sitharaman on March 26.

Official sources said that the cabinet approval is required to implement the proposal as it is expected to require additional budgetary allocation of around Rs 4,960 crore during the current year.

Moreover, the proposal to allow subscribers to withdraw 75 per cent of their EPF contribution or three months wages whichever is lower as contingency expenditure non-refundable advance would need an amendment to EPFO regulation.

Advertisement
The cabinet is scheduled to meet later in the day on Wednesday.

As part of the Rs 1,70,000 package announced by Sitharaman last month she also proposed that the government will bear entire 24 per cent EPF contribution of employer and employees (12 per cent each) for next three months. This support will be for employees of establishments that employ up to 100 employees and wages of 90 per cent of their employees is less than Rs 15,000 per month.

The measure was announced to provide relief to establishments facing disruptions due to lockdown and were facing shortages in cash flow even to meet statutory obligations.

Advertisement

For organised sector, EPFO regulation is being amended to implement the proposal on non-refundable advance.

"The PM Gareeb Kalyan scheme under which the government proposes to pay both the employer and employee PF contributions will ease liquidity challenges on the employer and ensure continuity of PF contributions for the employee.

"While the scheme is applicable to companies with up to 100 employees, the additional condition that 90 per cent of employees should earn less than Rs 15,000 per month will limit the applicability. The government should also clarify whether the Rs 15,000 refers to wages for the purpose of PF contribution or total wages," said Saraswathi Kasturirangan, Partner, Deloitte India.

Advertisement
As per the government data, as on April 13, about 2.1 Lakh members of EPFO have taken benefit of the online withdrawal of non-refundable advance from EPFO account amounting to Rs 510 crore. Besides, an amount of Rs 1,000 crore has already been released to EPFO for the Scheme (payment of EPF contribution) for the month of April, 2020. About 78.74 lakh beneficiaries and concerned establishments have been informed.

SEE ALSO:Coronavirus News and Updates
What are the Coronavirus symptoms and how to check for them at home
{{}}