Two months back in September, authorities made the changes in the labour welfare scheme by raising the bar for who must be covered by retirement protection. The wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) has been raised from INR 15,000 to INR 25,000 a month.
The limit had not moved since 2014. The change is expected to bring over 51 lakh more employees into the system.
Wages and living costs have constantly risen in the previous year due to global geopolitical instabilities, and a ceiling that once captured the average salaried worker had begun to leave out many people who earn modestly but are far from secure. For them, a Provident Fund (PF), a pension and life insurance cover should not depend on an employer’s goodwill.
To simplify the details, EPFO, the nation’s social security coverage, rests on three pillars, all reissued for 2026 under the Code on Social Security, 2020.
The PF lets workers and employers build a retirement corpus that earns interest.
The Pension Scheme pays a monthly income on retirement or disability, and extends to a member’s spouse and children after death. The insurance scheme pays up to INR 7 lakh to the family if a member dies in service, with no separate premium.
The scale with which it happens is important. Contributing members have more than doubled since 2014-15, from 3.49 crore to nearly 8 crore. Pensioners number about 82 lakh.
Overall social protection coverage has reportedly risen from 19% in 2015 to 68.4% this year.
The Revision
The most welcome change is that EPFO has folded 13 confusing withdrawal provisions into three categories: “essential needs, housing and special circumstances”. It allows up to ten withdrawals for education and five for marriage, up from a shared limit of three.
Claims of up to INR 5 lakh can now be settled automatically, and members no longer need to upload cheque images for eligible online claims.
This saves a lot of inconveniences and unnecessary delays in the process. Anyone who has chased a provident fund claim knows bureaucratic delays are often troublesome. Allowing members to withdraw up to 75% of their balance is a lifeline in a crisis, but a retirement fund that is easy to drain may be thin when retirement comes. The government should watch whether flexibility today becomes a hardship tomorrow.
Employers get relief too. VISHWAS 2026 offers a one-time settlement of penalty disputes, and AMNESTY 2026 lets certain private PF trusts obtain exemption retrospectively until December 28. Both should cut litigation. The test is whether they improve compliance or merely reward past lapses.
Digital reform is where EPFO has made its leads. Workers can generate their own Universal Account Number (UAN), now even through face authentication on the UMANG app. Pensioners can draw their pension at any bank branch, and India Post Payments Bank will deliver life certificates to their doorsteps at no cost. For an elderly pensioner in a remote village, that is a massive relief.
The harder question is about those outside payrolls. The new Pradhan Mantri Samajik Sahayata Yojana, which replaces the National Social Assistance Programme, runs until 2030–2031. It lowers the disability threshold to 40% and removes the minimum age. Yet its old-age pension is just INR 200 a month for those aged 60 to 79.
Better prospects lie in e-Shram, which has registered 31.89 crore unorganised workers, and PM-SYM, which promises a minimum INR 3,000 monthly pension to low-income workers who contribute INR 55 to INR 200 a month, matched by the government. The Code on Social Security also, for the first time, recognises gig and platform workers in law. Recognition, however, is a promise. The real work lies in the schemes that follow.
The government’s ambition is universal social security, and its main vehicle is EPFO 3.0, a core-banking-style overhaul. Risk-checked claims would be processed automatically, cutting settlement from up to 20 days to under three, with instant withdrawals and multilingual self-service for over 30 crore members.
That is what the authorities are aiming at. But India’s social security story will be judged less by ceilings raised and portals launched than by whether a gig worker, a domestic helper or a small-town clerk can trust that the money will be there when they need it.
COURTESY – PIB SRINAGAR
