EPFO EO/AO 2023 General Ability Test · Question 35 of 120

Correct — C, (c) The provisions of the Act shall not be applicable to Cooperative Societies employing fifty or more persons working without the aid of power. The booklet prints the stem's 'not' in bold italic, so the item wants the statement that misstates the Act, and this one inverts the statutory threshold. The exclusion lives in section 16(1)(a) of the EPF & MP Act, 1952, which says the Act shall not apply to any establishment registered under the Co-operative Societies Act, 1912 or under any State law relating to co-operative societies, employing LESS THAN fifty persons and working without the aid of power. Option (c) says 'fifty or more', which is the opposite of what the section provides. A co-operative society that employs fifty or more persons is not excluded at all. Two things are worth fixing in memory here. First, the two conditions in section 16(1)(a) are conjunctive: the society must be both under fifty persons AND working without the aid of power. A co-operative society of thirty employees that uses power is outside the exclusion and inside the Act. Second, the fifty is a special number. The Act's ordinary applicability threshold under section 1(3) is TWENTY or more persons — for a factory in a Schedule I industry, or for any other establishment notified by the Central Government. Section 16(1)(a) gives powerless co-operative societies a more generous exemption ceiling than the general rule, which is exactly why the figure is worth remembering separately.

• (a)It makes provision for pension scheme including family pension. — This is correct, so it cannot answer a 'not correct' stem. Section 6A empowers the Central Government to frame a pension scheme, and the Employees' Pension Scheme, 1995 made under it provides superannuation and retiring pension, permanent total disablement pension, and family benefits — widow's or widower's pension, children's pension and orphan pension. The earlier Family Pension Scheme of 1971 was framed under the same section and was superseded by the 1995 Scheme. Family pension is therefore squarely within the Act.
• (b)It makes provision for Employees' Deposit Linked Insurance Scheme. — This is correct. Section 6C provides for the Employees' Deposit Linked Insurance Scheme, and the EDLI Scheme, 1976 was framed under it. It is the third of the Act's three schemes alongside the Provident Fund Scheme and the Pension Scheme, and it is distinctive in being funded entirely by the employer — a contribution of half a per cent of wages, with nothing deducted from the employee.
• (d)The contribution by the employer to the Fund shall be on the basis of the basic wage, dearness allowance and retaining allowance (if any) of the employee. — This is correct, and it is close to the language of section 6 itself, which fixes the employer's contribution as a percentage of the basic wages, dearness allowance and retaining allowance (if any) payable to each employee — with the employee's own contribution equal to the employer's. Section 6 sets the rate at ten per cent with a proviso under which twelve per cent applies to notified classes of establishments, twelve being the rate in general use. Of the employer's share, 8.33 per cent of wages is diverted to the Employees' Pension Scheme under section 6A and the balance stays in the provident fund.

The EPF & MP Act, 1952 runs three schemes off one contribution. The Employees' Provident Fund Scheme, 1952 under section 5 is the savings limb; the Employees' Pension Scheme, 1995 under section 6A is the pension limb, funded by diverting 8.33 per cent of wages out of the employer's share; and the Employees' Deposit Linked Insurance Scheme, 1976 under section 6C is the insurance limb, funded by the employer alone. Section 6 sets the contribution base — basic wages, dearness allowance and retaining allowance — and the rate. Section 1(3) sets the applicability threshold at twenty or more persons, and section 16 then lists the establishments the Act does not touch: small powerless co-operative societies, and government or statutory establishments whose employees already enjoy a contributory provident fund or old age pension under their own rules.

This is the paper's own statute, and the Commission asks it the way an examiner asks about ground the candidate is expected to own: not by testing whether he knows the schemes exist, but by inverting a single number inside an exclusion clause. Three of the four statements are unimpeachable, so the item is decided entirely by whether section 16(1)(a) is remembered as 'less than fifty' or merely as 'fifty'. The habit rewarded is reading a statutory threshold with its direction attached — under or over — because a threshold without a direction is half a fact.

• EPF & MP Act, 1952, section 16(1)(a) — the Act does not apply to a registered co-operative society employing LESS THAN fifty persons AND working without the aid of power; both conditions must be satisfied.
• Section 1(3) — the Act applies to a factory in a Schedule I industry employing twenty or more persons, and to other establishments employing twenty or more persons as notified by the Central Government.
• Section 16(1) also excludes establishments under the Central or a State Government, and establishments set up under any Central, Provincial or State Act, whose employees already get a contributory provident fund or old age pension under their own rules.
• Section 5 — the Employees' Provident Fund Scheme, 1952.
• Section 6A — the Employees' Pension Scheme, 1995, including widow's or widower's pension, children's pension and orphan pension; it superseded the Family Pension Scheme, 1971.
• Section 6C — the Employees' Deposit Linked Insurance Scheme, 1976, funded wholly by the employer at half a per cent of wages.
• Section 6 — contribution computed on basic wages, dearness allowance and retaining allowance (if any); ten per cent, with twelve per cent applying to notified classes and being the rate in general use.
• Of the employer's contribution, 8.33 per cent of wages goes to the Pension Scheme and the balance to the provident fund.
• The statutory wage ceiling for coverage is Rs. 15,000 per month.

• Remembering 'fifty' for co-operative societies but not 'less than fifty'. The direction is the whole question here.
• Treating the two conditions in section 16(1)(a) as alternatives. A society under fifty that uses power is still covered.
• Importing the general twenty-person threshold into the co-operative society clause, or the reverse.
• Assuming EDLI is contributory for the employee. It is funded by the employer alone.

The EPF Act is asked in every EO/AO paper, usually through thresholds and rates — twenty persons, fifty persons for co-operatives, Rs. 15,000 wage ceiling, ten and twelve per cent, 8.33 per cent to pension, half a per cent to EDLI — or through the institutional chain of determination, appeal and recovery. Both are best learned as numbers attached to section references.

No directly related past PYQ was found.

• practice — not a real PYQ

  Under section 16(1)(a) of the EPF & MP Act, 1952, a registered co-operative society is outside the Act only if it employs :

  • (a)Less than twenty persons and works without the aid of power
  • (b)Less than fifty persons and works without the aid of power
  • (c)Fifty or more persons and works without the aid of power
  • (d)Less than fifty persons, whether or not it works with the aid of power

  Answer(b) Less than fifty persons and works without the aid of power

• practice — not a real PYQ

  The Employees' Deposit Linked Insurance Scheme is framed under which section of the EPF & MP Act, 1952 ?

  • (a)Section 5
  • (b)Section 6A
  • (c)Section 6C
  • (d)Section 7A

  Answer(c) Section 6C