EPFO: Activate UAN, link Aadhaar with bank a/cs to get ELI scheme benefits

Employees must activate their Universal Account Number (UAN) and link Aadhaar to their bank accounts by November 30, 2024 to be eligible for the Employment Linked Incentive (ELI) scheme.

 

"Since benefits under the ELI scheme will be disbursed through Direct Benefit Transfer (DBT), employers are urged to ensure UAN activation and Aadhaar seeding in bank accounts by November 30, 2024 for all employees who joined during the current financial year, particularly recent recruits," said the Ministry of Labour and Employment in a circular issued on November 22.

 

UAN activation and Aadhaar linkage is mandatory

 

The Employees’ Provident Fund Organisation (EPFO) explained that activating UAN and linking Aadhaar provides employees access to several services.

 

 

"Every EPFO subscriber must have an Aadhaar-linked UAN activated through the Member Portal. This allows employees to view their PF passbooks, submit claims, update personal details, and track claims in real time," the EPFO said in its circular. "The activation process can be completed using an Aadhaar-based OTP."

 

Akshay Jain, partner at Saraf and Partners said, "Aadhaar linking with UAN is mandatory for fund withdrawals and EPFO benefits. The latest directive ensures smooth identification and transfer of ELI scheme benefits, especially for first-time employees," he said.

 

He added that while specific details of the ELI scheme are awaited, employers should encourage compliance to avoid procedural delays.

 

Steps to activate your UAN

 

The EPFO has outlined a process to activate your UAN:

 

1. Visit the EPFO Member Portal (https://unifiedportal-mem.epfindia.gov.in/memberinterface/).

2. Click on ‘Activate UAN’ under the ‘Important Links’ section.

3. Enter your UAN, Aadhaar number, date of birth, and Aadhaar-linked mobile number.

4. Click ‘Get Authorisation PIN’ and verify the OTP sent to your mobile number.

5. A password will be sent to your registered mobile number upon successful activation.

 

What is the ELI scheme?

 

The Employment Linked Incentive (ELI) scheme, introduced in the 2024 Union Budget, seeks to create over 20 million jobs in two years by incentivising formal-sector employment.

 

The scheme has three components:

 

Scheme A: Offers a subsidy equivalent to one month's wages (up to Rs 15,000) for first-time EPFO-registered employees earning under Rs 1 lakh monthly. Employers must retain these employees for 12 months to avoid refunding the subsidy.

 

Scheme B: Targets manufacturing employers with a three-year EPFO contribution history. Employers must hire at least 50 new employees or 25% of their workforce. Incentives are disbursed over four years: 24% of wages for two years, 16% in the third year, and 8% in the fourth year. Employees must earn up to Rs 1 lakh per month.

 

Scheme C: Supports small and large employers expanding their workforce by at least 2 or 5 employees, respectively. Up to Rs 3,000 monthly EPFO contributions are reimbursed for additional hires earning up to Rs 1 lakh.

 

The scheme also includes initiatives to skill 2 million youth, offer internships to 10 million young people, and promote gender equality through skilling programmes and women’s hostels.

 

Benefits for employees and employers

 

Sandeep Agrawal, director and founder of Teamlease Regtech, said the scheme directly benefits employees and encourages stable employment. "First-time employees receive a wage subsidy under Scheme A. Schemes B and C indirectly benefit employees by incentivising employers to create new jobs," he explained.

 

Agrawal added, "The compulsory financial literacy courses and internships bridge the gap between academic learning and workplace demands. This equips individuals with practical skills for long-term career growth."

 

Employees who do not link Aadhaar with their bank accounts risk missing out on these benefits. Employers are advised to assist employees in completing the necessary compliance to ensure smooth disbursement of incentives.