📌 Introduction: A Significant Shift in India’s Social Security Regime

On 21 November 2025, the Government of India took a decisive step towards modernising the country’s social security framework by enforcing the Code on Social Security, 2020 through Gazette Notification No. 5143.

Subsequently, the Employees’ State Insurance Corporation (ESIC) issued an important clarification via Headquarters Circular File No. N-11011/2/2025-BFT-II dated 28 November 2025, formally adopting revised statutory definitions of:

• “Dependant” – Section 2(24)(c)

• “Family” – Section 2(33)(e)

These revised definitions replace those under the ESI Act, 1948, which now stands repealed. The changes have wide-ranging implications for benefit eligibility, claims processing, employee declarations, and HR compliance systems across India.

⭐ Why This ESIC Update Matters

This reform goes far beyond a definitional amendment. It fundamentally reshapes the benefit entitlement architecture under ESIC.

The Code on Social Security, 2020 aims to:

✔ Modernise ESIC benefits
✔ Expand the social welfare net
✔ Reflect evolving family structures
✔ Promote gender-inclusive protection
✔ Standardise definitions across labour laws

As a result, a larger set of dependants and family members are now eligible for ESIC benefits, directly impacting:

• Employees

• HR & Payroll teams

• Medical superintendents

• ESIC branch offices

• Compliance & audit functions

• Organisational welfare policies

1️⃣ Revised Definition of “Dependant” – Section 2(24)(c)

Two significant categories have been newly included:

✔ Widower
✔ Grandparents

🔎 Legal & Practical Implications

Under the erstwhile ESI Act, 1948, dependants were largely restricted to spouses, minor or infirm children, and parents. The Social Security Code, 2020 marks a progressive expansion:

✔ Inclusion of Widower
The husband of a deceased insured woman employee is now formally recognised as a dependant. This is a landmark reform acknowledging:

• Financial dependency in modern households

• Rise of women-led and dual-income families

• Gender-neutral social security protection

Widowers are now eligible for Dependent Benefits in cases of employment injury or insured contingencies.

✔ Inclusion of Grandparents
Recognising India’s joint-family realities, grandparents are now legally covered as dependants. This reflects:

• Multi-generational family support systems

• Elderly dependency on earning members

• Enhanced social protection for senior citizens

Grandparents can now claim ESIC Dependent Benefits, significantly strengthening welfare coverage.

2️⃣ Revised Definition of “Family” – Section 2(33)(e)

For women employees, the scope of “family” has been expanded to include:

✔ Father-in-law
✔ Mother-in-law

🔎 Legal & Social Significance

This amendment aligns ESIC provisions with contemporary social realities, including:

• In-laws residing in the same household

• Women contributing to medical expenses of in-laws

• The need for gender-balanced medical coverage

Previously excluded under the ESI Act, 1948, in-laws of women employees are now eligible for full ESIC medical benefits, making family coverage more inclusive and equitable.

This change directly benefits women employ01 ed across sectors such as:

• Manufacturing & factories

• Retail & services

• Healthcare

• Logistics

• IT & ITES

🧭 Operational & HR Compliance Impact – Employer Action Points

The ESIC Headquarters Circular places clear compliance responsibility on employers. Immediate action is required on the following fronts:

📍 1. Update ESIC Declaration Forms (Form-1)

Enable inclusion of:

• Widower

• Grandparents

• Father-in-law

• Mother-in-law

📍 2. Upgrade HRMS, Payroll & ERP Systems

Systems must support:

• New relationship categories

• ESIC integration fields

• Updated eligibility logic

• Revised claims validation workflows

📍 3. Review and Reassess Pending Claims

Previously rejected or closed claims may now require reopening, including:

• Dependent Benefit claims

• Medical benefit claims for in-laws

• Death benefit cases

📍 4. Employee Communication

Issue a formal advisory, with special focus on:

• Women employees

• Employees supporting grandparents

• Joint-family dependants

📍 5. Align with Broader Labour Code Compliance

This ESIC reform forms part of the wider Four Labour Codes, impacting:

• Wage definition (50% rule)

• PF, ESI & Gratuity coverage

• Compliance timelines

• Penalties under the Social Security Code

• Contribution ceilings & benefit structures

Organisations must be prepared for compliance audits, documentation alignment, and HR policy restructuring.

📘 Legal References (For Audit & Records)

• Code on Social Security, 2020

  • Section 2(24) – Dependant

  • Section 2(33) – Family

• Gazette Notification No. 5143, dated 21 November 2025

• ESIC HQ Circular File No. N-11011/2/2025-BFT-II, dated 28 November 2025

These documents should be preserved in the organisation’s Statutory ESIC Compliance Register.

🎯 Conclusion

The enforcement of the Code on Social Security, 2020 and ESIC’s revised definitions mark a historic expansion of India’s social welfare framework. By recognising widowers, grandparents, and in-laws within ESIC coverage, the Government has aligned social security law with the realities of modern Indian families.

Employers must act swiftly to update systems, revise records, educate employees, and ensure that all eligible dependants receive their rightful ESIC benefits without delay.

CPS LLP Group  will continue to monitor developments under the Four Labour Codes and issue timely advisories to help organisations remain fully compliant.