EPFO's new social security rules tighten claim timelines, mandate digital compliance

The government has notified a new set of social security schemes under the Code on Social Security, placing greater emphasis on digital compliance and faster settlement of provident fund, pension and insurance claims, while retaining the existing contribution structure for employees and employers.

The Ministry of Labour and Employment has notified the Employees' Provident Funds Scheme, 2026, Employees' Pension Scheme, 2026 and Employees' Deposit-Linked Insurance Scheme, 2026, which will replace the existing schemes governing provident fund, pension and deposit-linked insurance.

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One of the key provisions under the new framework is a stricter accountability mechanism for delays in processing claims. Officials of the Employees' Provident Fund Organisation (EPFO) could face a penal interest of 12 per cent per annum if eligible claims are not settled within 20 days without sufficient cause.

The notified scheme states: "Where the Commissioner fails without sufficient cause to settle a claim complete in all respects within twenty days, the Commissioner shall be liable for the delay beyond the said period and penal interest at the rate of twelve per cent per annum may be charged on the benefit amount, which shall be deducted from the salary of the Commissioner."

The provision applies to claims relating to provident fund withdrawals, pension fixation and benefits under the Employees' Deposit-Linked Insurance Scheme.

A senior Labour Ministry official told PTI that while a penalty for delayed claim settlement existed under the earlier framework as well, the methodology has changed.

Also Read: PF exemptions to now align in full with EPFO rules

Earlier, officials were liable to pay the declared EPF interest rate on delayed settlements. Under the new schemes, the penal interest has been fixed at 12 per cent per annum.

The official said the new framework does not make any significant changes to the contribution structure under the EPFO's social security schemes.

Employees and employers will continue to contribute 12 per cent of the employee's basic wage. Of the employer's contribution, 8.33 per cent will continue to be diverted to the Employees' Pension Scheme, while the government will maintain its contribution of 1.16 per cent towards the pension fund.

The official said the primary objective of the new schemes is to improve digital compliance by both employers and the EPFO, enabling members to access services online with minimal delays.

The new rules also extend digital compliance requirements to exempted establishments and EPF trusts regulated by the EPFO. Such entities will now be required to provide online facilities for filing claims and other applications, allowing members to access services electronically.

The newly notified schemes replace the Employees' Provident Funds Scheme, 1952, the Employees' Family Pension Scheme, 1971, the Employees' Pension Scheme, 1995, and the Employees' Deposit-Linked Insurance Scheme, 1976, bringing the EPFO's regulatory framework in line with the Code on Social Security.