Government to Refund Unclaimed EPFO Deposits and Enhance Scholarships for Children of Unorganised Workers
The Labour Ministry has announced a significant initiative aimed at returning unclaimed funds from dormant Employees’ Provident Fund Organisation (EPFO) accounts to subscribers. This decision, revealed by Labour Minister Mansukh Mandaviya, is expected to benefit over 3.1 million account holders. A pilot program will soon be launched, targeting approximately 700,000 subscribers, as part of a broader effort to address the issue of inoperative accounts, which currently hold deposits totaling Rs 10,903 crore.
Details of the Initiative
The EPFO currently manages around 31.86 lakh inoperative accounts, many of which have remained untouched for years. The ministry has identified that nearly 7.11 lakh of these accounts contain unclaimed balances of up to Rs 1,000, amounting to Rs 30.52 crore. Accounts are classified as inoperative if they have not recorded any transactions for the past three years, with some accounts dating back as far as 20 years. The selected accounts for the pilot phase have Aadhaar-linked bank details, allowing the EPFO to directly credit the pending amounts to the respective subscribers.
Under the EPF & MP Act, beneficiaries are required to file claims to withdraw their provident fund savings. However, many account holders find the balance amounts too small compared to the documentation needed to process their claims. This has led to a significant accumulation of unclaimed deposits over time, prompting the ministry’s recent decision to streamline the process and facilitate easier access to these funds.
Enhancements to Education Assistance
In addition to the fund recovery initiative, the Labour Ministry is also strengthening its education assistance program for the children of unorganised workers. The ministry has introduced a merit-based scholarship of up to Rs 25,000, which will complement the existing welfare-based support. This change aims to enhance equity and remove unintended exclusions from the program.
The ministry’s statement emphasized that students receiving welfare-based scholarships will now also be eligible for merit-based scholarships from any central or state government agency, provided they meet the necessary criteria. This year alone, approximately 0.16 million students have benefited from welfare-based financial assistance, totaling Rs 77.9 crore. This marks a significant increase compared to the previous year, where 92,118 beneficiaries received Rs 31.65 crore.
Alignment with Social Security Goals
The initiatives introduced by the Labour Ministry align with the objectives outlined in the Code on Social Security, 2020. This legislation aims to expand social security and welfare measures for unorganised workers and their families, including education support. By enhancing the education assistance program and addressing the issue of unclaimed provident fund deposits, the ministry is taking significant steps towards improving the welfare of unorganised workers in India.
These measures reflect the government’s commitment to ensuring that workers and their families receive the support they need, particularly in the wake of economic challenges. As the pilot program rolls out, it is anticipated that many account holders will finally gain access to their long-overdue funds, while students will benefit from enhanced educational opportunities.
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