On November 12th 2020, Union Finance Minister Nirmala Sitharaman announced another set of stimulus measures under the Atmanirbhar Bharat Abhiyaan 3.0 scheme to incentivize jobs creation in the country. The benefits of this scheme will be given to all the Establishments registered with the Employee Provident Fund Organization (EPFO) and which employ new employees or give employment to those who lost jobs between March 1 2020 and September 30 2020 due to covid-19.
Who are eligible to obtain the benefit?
This scheme is a contribution to the PF account of employees who have lost jobs during the period from March 1st 2020 to September 30th 2020 and subsidy to the establishment.
Under this scheme government will contribute provident fund (employers and employees share at the rate of 12 per cent of wages) for two years to organizations with employee strength less than 1000.
For those companies which are having the strength more than 1,000 employees, the government will provide only employee’s contribution at the rate of 12 per cent of wages.
The benefit will be provided to only those employees with wages less than ₹ 15,000 per month. The subsidy in the form of PF contributions will be directly credited into the Aadhaar-seeded EPF account (UAN) of the employee.
Points to be consider for getting the PF subsidy
Establishments with less than 50 employees must recruit at least two new employees and organizations with more than 50 employees must employ at least five new employees.
The month of September will be considered as the base for the scheme. For organizations with up to 1,000 employees who earn up to Rs 15,000 per month and are registered under EPFO, the 12% contribution of the employees and 12% from the employer – amounting to a total 24% will be borne entirely by the central government.
When the scheme will be become effective?
The scheme will be in effect from 1 October 2020 and 30 June 2021, meaning new employment has to take place between this period.