UPSC Prelims Practice Questions — Cabinet approves enhancement of EPFO wage ceiling from Rs.15,000 to Rs.25,000 per month

Q1. Consider the following statements comparing the two most recent revisions of the statutory wage ceiling for mandatory coverage under the Employees' Provident Fund Organisation: 1. The earlier revision raised the ceiling from Rs.6,500 to Rs.15,000 per month, while the latest revision raises it from Rs.15,000 to Rs.25,000 per month. 2. Unlike the earlier revision, which was cleared by the Union Cabinet, the latest revision was cleared by the Central Board of Trustees of the EPFO without reference to the Union Cabinet. 3. The latest revision is estimated to bring more than 51 lakh additional employees within the ambit of mandatory coverage, and takes effect from 17 September 2026. Which of the statements given above is/are correct?

  1. The earlier revision raised the ceiling from Rs.6,500 to Rs.15,000 per month, while the latest revision raises it from Rs.15,000 to Rs.25,000 per month.
  2. Unlike the earlier revision, which was cleared by the Union Cabinet, the latest revision was cleared by the Central Board of Trustees of the EPFO without reference to the Union Cabinet.
  3. The latest revision is estimated to bring more than 51 lakh additional employees within the ambit of mandatory coverage, and takes effect from 17 September 2026.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q2. The enhanced statutory wage ceiling of Rs.25,000 per month for mandatory social security coverage, effective from 17 September 2026, is operationalised through which one of the following?

  • A. The Employees' State Insurance Corporation, a statutory body under the Ministry of Labour & Employment
  • B. The Employees' Provident Fund Organisation, a statutory body under the Ministry of Labour & Employment
  • C. The Pension Fund Regulatory and Development Authority, a statutory body under the Ministry of Finance
  • D. The National Social Security Board, a statutory body under the Ministry of Rural Development

Q3. In the context of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the statutory wage ceiling that stood at Rs.6,500 per month between 2004 and 2014 denoted which one of the following?

  • A. The maximum monthly amount an employer was permitted to deduct from an employee's wages towards administrative and inspection charges
  • B. The monthly pay threshold above which a covered establishment was required to obtain exemption from the statutory schemes
  • C. The monthly pay threshold up to which enrolment of an employee was compulsory and statutory contributions were reckoned
  • D. The maximum monthly pensionable salary prescribed for computing the assurance benefit payable on the death of a member

Q4. With reference to the chronology of revisions in the statutory wage ceiling for mandatory EPFO coverage, consider the following: 1. Between 2004 and 2014 the ceiling remained unchanged at Rs.6,500 per month. 2. The ceiling was raised to Rs.15,000 per month in September 2014. 3. The ceiling was raised to Rs.21,000 per month with effect from 1 January 2017. 4. The revision approved in September 2026 was the first change in the ceiling since 2014. Which of the above is/are correctly identified?

  1. Between 2004 and 2014 the ceiling remained unchanged at Rs.6,500 per month.
  2. The ceiling was raised to Rs.15,000 per month in September 2014.
  3. The ceiling was raised to Rs.21,000 per month with effect from 1 January 2017.
  4. The revision approved in September 2026 was the first change in the ceiling since 2014.
  • A. 1 and 3
  • B. 2, 3 and 4
  • C. 1, 2 and 4
  • D. 3 and 4 only

Q5. The Employees' Deposit Linked Insurance Scheme, 1976, which provides an assurance benefit to the family of a member on the member's death, is administered by which one of the following?

  • A. The Life Insurance Corporation of India, constituted under the Life Insurance Corporation Act, 1956
  • B. The Insurance Regulatory and Development Authority of India, constituted under the IRDA Act, 1999
  • C. The Employees' Provident Fund Organisation, through the Central Board of Trustees constituted under the EPF & MP Act, 1952
  • D. The Employees' State Insurance Corporation, constituted under the Employees' State Insurance Act, 1948

Q6. With reference to the schemes framed under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, consider the following: 1. The corpus of the Employees' Pension Fund includes an employer contribution at the rate of 8.33 per cent of wages. 2. The Central Government contributes to the Employees' Pension Scheme through budgetary support at the rate of 1.16 per cent of wages, subject to the statutory monthly wage limit. 3. The maximum assurance benefit payable under the Employees' Deposit Linked Insurance Scheme is Rs.7 lakh. 4. The Employees' Pension Scheme, 1995 is a purely defined-contribution scheme in which the monthly pension varies with the investment returns earned on the member's accumulations. Which of the statements given above is/are correct?

  1. The corpus of the Employees' Pension Fund includes an employer contribution at the rate of 8.33 per cent of wages.
  2. The Central Government contributes to the Employees' Pension Scheme through budgetary support at the rate of 1.16 per cent of wages, subject to the statutory monthly wage limit.
  3. The maximum assurance benefit payable under the Employees' Deposit Linked Insurance Scheme is Rs.7 lakh.
  4. The Employees' Pension Scheme, 1995 is a purely defined-contribution scheme in which the monthly pension varies with the investment returns earned on the member's accumulations.
  • A. 1 and 4 only
  • B. 1, 2 and 3 only
  • C. 2 and 4 only
  • D. 3 and 4 only

Q7. The Central Board of Trustees, EPF, reconstituted by the Central Government under Section 5A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, is presided over as Chairman by which one of the following?

  • A. The Central Provident Fund Commissioner, Employees' Provident Fund Organisation
  • B. The Minister of State for Labour & Employment, Government of India
  • C. The Secretary in the Ministry of Labour & Employment, Government of India
  • D. The Union Minister for Labour & Employment, Government of India

Q8. Consider the following statements regarding the fiscal implications of the September 2026 enhancement of the EPFO statutory wage ceiling: 1. The existing annual budgetary support of the Central Government, prior to the enhancement, was of the order of Rs.10,250 crore. 2. Consequent to the enhancement, the estimated annual outgo of the Central Government rises to about Rs.11,339 crore. 3. The estimated expenditure on account of the enhancement is about Rs.11,339 crore over five years, against an estimated annual outgo of about Rs.56,696 crore. Which of the statements given above is/are correct?

  1. The existing annual budgetary support of the Central Government, prior to the enhancement, was of the order of Rs.10,250 crore.
  2. Consequent to the enhancement, the estimated annual outgo of the Central Government rises to about Rs.11,339 crore.
  3. The estimated expenditure on account of the enhancement is about Rs.11,339 crore over five years, against an estimated annual outgo of about Rs.56,696 crore.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q9. With reference to the fiscal implications of the September 2026 enhancement of the EPFO statutory wage ceiling, consider the following: 1. The enhancement raises the Central Government's annual budgetary commitment by roughly Rs.1,100 crore over the pre-revision level. 2. The entire additional expenditure arising from the enhancement is borne exclusively by employers, imposing no recurring commitment whatsoever on the Union Budget. 3. The figure of about Rs.56,696 crore represents the expenditure estimated over a five-year horizon. 4. The Central Government's budgetary support to the pension component is a permanent and open-ended liability that is unrelated to any prescribed wage limit. Which of the above is/are correctly identified?

  1. The enhancement raises the Central Government's annual budgetary commitment by roughly Rs.1,100 crore over the pre-revision level.
  2. The entire additional expenditure arising from the enhancement is borne exclusively by employers, imposing no recurring commitment whatsoever on the Union Budget.
  3. The figure of about Rs.56,696 crore represents the expenditure estimated over a five-year horizon.
  4. The Central Government's budgetary support to the pension component is a permanent and open-ended liability that is unrelated to any prescribed wage limit.
  • A. 1 and 3
  • B. 2 and 4
  • C. 1, 3 and 4
  • D. 2 only

Q10. The September 2026 enhancement of the statutory wage ceiling for mandatory EPFO coverage was given legal effect through which one of the following routes?

  • A. A binding direction of the Supreme Court compelling the Union to revise every statutory social security threshold decennially
  • B. An Ordinance promulgated by the President under Article 123, since Parliament was necessarily not in session
  • C. A notification under the existing EPF & MP Act, 1952 framework, following approval by the Union Cabinet
  • D. A fresh amendment Act passed by both Houses of Parliament, which alone can alter any scheme-level threshold

Q11. Consider the following statements comparing coverage thresholds under the two principal contributory social security statutes administered by the Ministry of Labour & Employment: 1. The wage ceiling for coverage under the Employees' State Insurance Act, 1948 was revised to Rs.21,000 per month with effect from 1 January 2017. 2. For persons with disability, the wage limit for coverage under the Employees' State Insurance Act, 1948 is Rs.25,000 per month. 3. The Employees' State Insurance Act, 1948 extends to establishments employing twenty or more persons, whereas the EPF & MP Act, 1952 extends to those employing ten or more persons. Which of the statements given above is/are correct?

  1. The wage ceiling for coverage under the Employees' State Insurance Act, 1948 was revised to Rs.21,000 per month with effect from 1 January 2017.
  2. For persons with disability, the wage limit for coverage under the Employees' State Insurance Act, 1948 is Rs.25,000 per month.
  3. The Employees' State Insurance Act, 1948 extends to establishments employing twenty or more persons, whereas the EPF & MP Act, 1952 extends to those employing ten or more persons.
  • A. 1 only
  • B. 2 and 3 only
  • C. 1 and 2 only
  • D. 1, 2 and 3