Understanding EDLI Benefits Calculation for Periods Exceeding One Year
In the case of the Employee's Deposit Linked Insurance (EDLI) scheme, the calculation involves two components as you have mentioned. Let's delve into the second part to provide clarity on how the average balance during the preceding 12 months is determined:
1. Average Balance Calculation:
- The average balance during the preceding 12 months is calculated by summing up the balances in the deceased employee's account for each month over the past year and then dividing this total by 12. This average balance is then used to determine the benefit amount under the EDLI scheme.
2. Understanding the 50% Factor:
- The 50% factor mentioned in the calculation signifies that the benefit amount payable under the EDLI scheme is 50% of the average balance calculated for the preceding 12 months. This means that half of the average balance is considered for determining the EDLI benefit in the event of the employee's demise.
3. Practical Example:
- For instance, if the average balance in the deceased employee's account over the past 12 months is INR 500,000, the benefit amount payable under the EDLI scheme would be INR 250,000 (50% of INR 500,000).
4. Consulting Relevant Authorities:
- It is advisable to refer to the specific guidelines provided by the Employees' Provident Fund Organisation (EPFO) or the concerned regulatory body in India for precise calculations and further details regarding EDLI benefits in the unfortunate event of an employee's demise.
By understanding the calculation methodology and the factors involved in determining EDLI benefits for periods exceeding one year, you can ensure compliance with the scheme's provisions and provide accurate information to employees and beneficiaries.