Anshul Prakash, Partner-Employment Labour & Benefits, Khaitan & Co, says, “The Supreme Court judgment clarifies that as long as an employee was a member of the EPS on the said date, they can opt for higher contributions even if they had not opted for such higher contributions during the 6-month window that was provided to them effective September 1, 2014. Thus, as long as you were a member of EPS (active or inactive) on September 1, 2014, you are eligible to submit an application for higher pension under EPS.”
There could be various reasons why an employee was unable to make contributions to the EPF account. Some of these reasons are as follows:
a) The employee was working with an organisation not covered under the EPF Act
b) The individual was unemployed but has not taken out their money from the EPF and/ or EPS account
c) The employee has closed the EPF account but was unable to close the EPS account. This is because if the employee has contributed to the EPF account for more than 10 years, they cannot make a lump sum withdrawal from the EPS account. The individual is eligible to receive pension from the age of 58 if they have contributed to the EPF account for more than 10 years.
In such situations, as long as you were holding an unsettled EPS account (with some balance) on September 1, 2014, you are eligible to apply for the higher pension from the EPS account.
Who are eligible employees as per the Supreme Court judgment
The Supreme Court verdict has divided the eligible employees into two categories.The first category is employees who opted for higher contribution to the pension scheme, actively made their contribution but at the time of receiving higher pension, their request was rejected by the EPF authorities.
For these employees, the EPFO issued the circular on December 29, 2022, providing instructions on how to submit an application to receive the higher pension. Further, the EPFO has provided a link on the Member e-Sewa portal to submit applications to receive the higher pension.
The second category is those employees who were members of the EPS on September 1, 2014. These members were eligible to submit the applications to receive the higher pension from the EPS at the time of retirement. However, they could not submit the application because they were not aware of this option or were not aware of this deadline.
The other necessary condition for eligibility for higher pension is that member and employer should have contributed a higher EPF amount on wages above the prevailing wage ceiling of Rs 5000 prior to May 31, 2001 or 6500 prior to September 1 2014.
For these employees, the EPFO issued a circular on February 20, 2023, giving instructions how eligible members should submit their applications. However, the EPFO is yet to provide an online facility to submit the required applications.
The last date to submit applications for the higher pension under the EPS is March 3, 2023. This is a deadline mandated by the Supreme Court.