With this move lawyers, doctors, chartered accountants and other self-employed individuals will be able to subscribe to the Employees’ Provident Fund Organisation.
New Delhi: The government plans to open up its key social security scheme — the Employees’ Provident Fund to self-employed individuals, a move that could expand security coverage to more than 90% of workers not falling under any social security scheme at present. At present only employees of organisations having minimum 10 employees are eligible to subscribe to the provident fund and pension schemes run by the EPFO.
With this move lawyers, doctors, chartered accountants and other self-employed individuals will be able to subscribe to the Employees’ Provident Fund Organisation, which manages the retirement corpus of about 60 million employees.
The idea of making EPFO individual-centric rather than establishment-centric is under examination, the Economic Times mentioned in a report citing an unnamed government official. The official further said that a decision is expected after the passage of the Social Security Code Bill, which was introduced in Lok Sabha late last year.
Worth mentioning here is that the Social Security Code subsumes 8 central labour laws, including the Employees Provident Funds & Miscellaneous Provisions Act (EPF&MP) Act, 1952.
The government has initiated the process of amalgamating existing social security laws under an umbrella social security organisation. However, opening up EPFO to individuals is seen as an effective measure to push social security.
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“Social security continues to be a key issue for the self-employed and expansion of EPFO could help address this gap,” the publication quoted another government official as saying.
According to the business daily, the Parliamentary Standing Committee on labour had suggested that the scheme be made available for individual subscribers and the government has decided to implement it. “There is a possibility which can be explored that the EPF&MP Act can be made applicable on any person or self-employed persons to become a part of EPF,” the panel had said recently.
According to the panel’s suggestion, individual will have to bear the entire contribution — about 20% of income or wage limit on account of employer share and employee share as well as administrative charges. “If the EPFO benefits are opened up for individuals also, it will help widen the social security net considerably, besides bringing millions under the formal headcount,” labour expert KR Shyan Sundar told ET.
Under the EPF&MP Act, the employer contributes 13% and the employee 12% of basic pay, which is deposited in the Employees’ Provident Fund Scheme, the Employees’ Pension Scheme Fund and the Employees’ Deposit Linked Insurance schemes of the EPFO.
