In the event of an employee's death, their family will receive Rs 20,000; new rules have come into effect—find out the procedure..

The Employees’ State Insurance Corporation (ESIC) has increased the financial assistance provided for funeral expenses, offering relief to the families of insured employees. In the event of an insured employee's death, an eligible family member will now receive ₹20,000 to cover funeral expenses—an increase from the previous amount of ₹15,000. This means families will now receive an additional ₹5,000 in support.

The ESIC issued a notification regarding this amount on October 7, 2026, which was subsequently published in the Official Gazette of the Government of India on October 16, 2026. Notably, the revised amount is effective retrospectively from May 8, 2026; this implies that for eligible cases occurring on or after this date, assistance will be provided in accordance with the new rules. This decision has been taken under the provisions of the Code on Social Security, 2020, and its associated rules.

Why did the ESIC increase the funeral expense allowance?
Families often incur various expenses during funeral rites. Providing financial assistance during such difficult times offers some relief. Recognizing this need, the ESIC has raised the funeral expense allowance from ₹15,000 to ₹20,000.

Following the announcement of this change, the All India NPS Employees Federation (AINPSEF) welcomed the decision. The organization emphasized the importance of disseminating this information to employees so that affected families can avail themselves of this benefit when the need arises.

Who is eligible to receive the funeral expense allowance?

According to the rules, this assistance is to be provided to the eldest surviving member of the deceased insured employee's family. The objective is to assist in covering costs associated with the funeral. However, under certain circumstances, this amount may be granted to another individual. If a deceased employee has no family, or was not living with their family at the time of death, the person who actually incurred the funeral expenses may be eligible for this assistance. In such cases, the aid can be provided to the individual who paid for the funeral expenses out of their own pocket. Eligibility will be determined in accordance with the relevant rules.

When did the new rule come into effect?
The ESIC issued a notification on October 7, 2026, establishing the new amount for funeral assistance. This was published in the Official Gazette on October 16. However, the effective date has been set as May 8, 2026. The new provision is deemed to be in force from May 8, 2026. This amount has been determined under Section 32(1)(f) of the Social Security Code, 2020, and Rule 21 of the Social Security (Central) Rules, 2026.

How will the families of employees receive this assistance?
This benefit is available to eligible claimants in the event of the death of an employee insured under the ESIC. Therefore, employees or their families should not assume that this amount will be granted automatically in every case. To receive the assistance, it may be necessary to meet specific eligibility criteria and complete a claims process. Employees and their families should seek information regarding the application procedure and the required documentation through official ESIC channels.

Disclaimer: This content has been sourced and edited from News18 Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.