EPFO Simplifies Death Claim Process: No Guardianship Certificate Needed for Minor Children
Introduction
The Employees' Provident Fund
Organisation (EPFO), under the Ministry of Labour & Employment, Government
of India, has issued a significant directive to simplify the settlement of
death claims. Issued on August 13, 2025, the new guideline explicitly states
that a guardianship certificate is no
longer required for payments of provident fund or pension settlements to
the bank accounts of surviving minor children. This move aims to ease the
burden on bereaved families and ensure a faster payout process.
Earlier Practice
Previously, when an EPFO member passed
away and the settlement or pension was to be paid to their minor children,
offices frequently insisted on a formal guardianship certificate from the
claimants. This certificate—granted by a court—formally designated a guardian
authorized to manage the minor's financial affairs. The requirement often
resulted in lengthy procedures, legal expenses, and delays for families already
coping with loss.
Why Was a Guardianship Certificate
Required?
The rationale behind demanding a
guardianship certificate was to safeguard
the interests of minor children. Since minors cannot legally operate bank
accounts or independently manage significant financial assets, the certificate
served as official recognition of an adult (usually a parent or close relative)
who could act on the child’s behalf. It was a measure to ensure that the
settlement funds would be appropriately managed for the welfare of the minor.
Why This Change Was Introduced
The EPFO observed that requiring a
guardianship certificate—even in cases where the settlement is credited to the
minor’s bank account—caused unnecessary hardship and delayed timely support.
The main intention behind the change is to:
·
Simplify procedural requirements
·
Expedite financial relief for minor
claimants
·
Remove an additional legal and
administrative hurdle for grieving families
Now, as long as the payout is made
directly into the minor's account, the need for a guardianship certificate is
eliminated. This recognizes that a basic bank account in the minor's name, with
an adult acting as a joint account holder or guardian as per standard bank
practice, provides sufficient financial control and protection.
How This Change Will Affect Claimants
This policy adjustment is expected to
bring several benefits:
·
Faster Settlements: Families can receive settlement
amounts and pension funds much more quickly, without waiting for court
proceedings.
·
Reduced Paperwork: Fewer documents are required for
claimants, streamlining the application process.
·
Lower Expenses: Elimination of legal and court fees
associated with obtaining a guardianship certificate.
·
Increased Accessibility: The claim process becomes more
accessible to the families of deceased EPFO members, ensuring that minor
children receive timely financial support.
The New Process for Claimants
1. Open a
Bank Account in the Minor’s Name: If not already available, open a bank account in the name of the
minor child. As per standard banking procedure, a guardian (usually a surviving
parent or close relative) will operate the account on behalf of the minor.
2. Submit
the Death Claim: File
the provident fund or pension claim with the EPFO, specifying the bank account
details of the minor child.
3. No
Guardianship Certificate Needed: The EPFO office will no longer insist on a court-issued
guardianship certificate if the proceeds are being credited directly to the
minor’s account.
4. Receive
Settlement: The
settlement and any due pension are credited directly into the minor’s account
for their benefit.
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