You might soon take an increased salary home as the Modi government has been reportedly planning to cut down the social security contribution of employees. According to a report in the Economic Times, a Labour Ministry committee is working on the contributory ceiling by the government towards universal social security for all workers, may recommend a contribution which is at least 2 per cent lower than the current ceiling of 24 per cent.
If the move comes into action, the the total PF contribution from one’s salry will come down to 10 per cent from the previos mandatory 12 per cent.
It should be noted that an employee contributes 12 per cent of his basic salary to the EPF kitty. While 3.67 per cent of his/her basic salary is contributed by the employer in the EPF kitty and 8.33 per cent in the EPS or employee’s pension scheme.
The committee is expected to finalise its recommendation by the end of August, the report said citing a person aware of the matter.
According to the report, the government expects to increase those covered under the social security scheme to 50 crore from the current base of about 10 crore people.
“We are enhancing the scale of coverage by five-fold. Hence, we think that going forward the contribution by and for each worker eligible for a social security cover will come down, benefitting both employee and the employer,” the publication quoted an official as saying.
Earlier in June, it was reported that Retirement fund body EPFO had decided to give its members an option to withdraw 75 per cent of their funds after one month of unemployment and keep their PF account with the body.
The members would also have an option to withdraw remaining 25 per cent of their funds and go for final settlement of account after completion of two months of unemployment under the new provision in the Employee Provident Fund Scheme 1952.
“We have decided to amend the scheme to allow members to take advance from its account on one month of unemployment. He can withdraw 75 per cent of its funds as advance from its account after one month of unemployment and keep its account with the EPFO,” Labour Minister Santosh Kumar Gangwar, who is also the Chairman of EPFO’s Central Board of Trustees, told reporters after the trustees meet here.
At present, in case of unemployment, a subscriber can withdraw his or her funds after two months of unemployment and settle the account in one go.
The minister was of the view that this new provision would give an option to members to keep their account with the EPFO, which he can use after regaining employment again.