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PF Contributions Extended till August 2020; Cabinet Approves

PF Contributions Extended UnionCabinet
On Wednesday, 8th July 2020, the Union Cabinet approved a proposal for extension of the scheme for the payment of employees and employers’ PF contributions for three months until August 2020. Union Finance Minister Nirmala Sitharaman had announced the extension of the benefit in May this year under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) amid the COVID-19 pandemic. Union Minister Prakash Javadekar after the Cabinet meeting on Wednesday stated, “Cabinet has approved the extension of the scheme where the government pays contributions of employees and employers till August.” 

Pursuant to the Pradhan Mantri Garib Kalyan package, the payment of 12% of the employer and 12% of the employee contribution was rendered to the EPF accounts. For the June, July, and August 2020 wage months, the scheme would include all establishments with up to 100 employees and 90 percent of such employees with less than Rs 15,000 monthly salaries. The benefit was given earlier for the salary months of March, April, and May 2020. This support is extended by a further three months to the salary months of June, July, and August 2020. 

An official statement stated, “The Union Cabinet chaired by the Prime Minister Narendra Modi today has given its approval for extending the contribution both 12 percent employees' share and 12 percent employers' share under Employees Provident Fund, totaling 24 percent for another three months from June to August 2020, as part of the package announced by the government under Pradhan Mantri Garib Kalyan Yojana (PMGKY)/ Aatmanirbhar Bharat in the light of COVID-19, a pandemic.” The statement further added, “The approval is in addition to the existing scheme for the wage months of March to May 2020 approved on April 15, 2020. The total estimated expenditure is Rs 4,860 crore. Over 72 lakh employees in 3.67 lakh establishments will be benefitted.” 

Union Minister Prakash Javadekar stated that “the decision has been taken to facilitate more take-home salary for employees and give relief to employers in payment of PF dues. The government had imposed a lockdown on March 25 to fight the deadly COVID-19.” Extending the benefit would provide liquidity relief to 3, 67 lakh establishments. The statement stated that the Government will provide budgetary funding for Rs 4,800 crore for 2020-21 for this purpose. Beneficiaries entitled to a 12 percent employer contribution for June to August 2020 under Pradhan Mantri Rozgar Protsahan Yojana (PMRPY) will be excluded to prevent conflicting benefits. 

The statement further stated, “Due to prolonged lockdown, it was felt that businesses continue to face financial crisis as they get back to work. Therefore, the Finance Minister, as part of Aatmanirbhar Bharat, announced on May 13, 2020, that the EPF support for business and workers will be extended by another three months viz. for the wage months of June, July, and August 2020.” It added, “The government is of the view that businesses need support to ramp up production over the next quarter (July-September).” 

 

 


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