Sections 79 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 79 lets the competent authority review a half-monthly payment when the employee's condition changes. Section 80 lets the right to half-monthly payments be redeemed for a lump sum. Section 81 requires death compensation, and lump sums for women and persons under legal disability, to be deposited with the competent authority, which then distributes the money among dependants.
A half-monthly payment may be reviewed on an application by employer or employee, with a medical certificate of changed condition (or, on State conditions, without one), and may be continued, increased, decreased, ended or converted to a lump sum (s.79). After six months of payments, either party may apply to redeem them for a lump sum (s.80). Death compensation and any lump sum payable to a woman or a person under legal disability must be deposited with the competent authority; a direct payment is not treated as compensation (s.81(1)). The authority apportions death compensation among dependants after hearing them.
Why it matters
The most common mistake an employer makes in a fatal accident is paying the family directly. Section 81(1) says such a payment does not count as compensation, so the liability remains and the employer may have to pay again. A company handling such a case, or an insurer's claims team, should get legal consultation early. This article follows section 76 (amounts) and precedes sections 82 to 84 (notice and claim).
Section 79: review of half-monthly payments
Any half-monthly payment under the Chapter, whether under an agreement or an order of a competent authority, may be reviewed by the competent authority on application by the employer or the employee:
- accompanied by a medical practitioner's certificate that there has been a change in the employee's condition; or
- without a certificate, subject to conditions prescribed by the State Government.
On review the half-monthly payment may be continued, increased, decreased or ended. If the accident is found to have resulted in permanent disablement, it may be converted into the lump sum to which the employee is entitled, less any half-monthly amounts already received (s.79(2)).
Section 80: commutation
The right to receive half-monthly payments may be redeemed by a lump sum:
- by agreement between the parties; or
- if they cannot agree and the payments have continued for not less than six months, on application of either party to the competent authority, for an amount agreed or determined by the authority.
An agreement to pay a lump sum must be sent for registration under section 89 (see sections 88 to 90).
Section 81: deposit and distribution
Deposit rules
| Sub-section | Rule |
|---|---|
| 81(1) | No payment of death compensation, and no lump sum to a woman or a person under legal disability, except by deposit with the competent authority; a direct payment by the employer is not a payment of compensation |
| Proviso | For a deceased employee, the employer may make advances to any dependant of up to three months' wages of the employee; the authority deducts the part that does not exceed the dependant's compensation and repays it to the employer |
| 81(2) | Any other sum of Rs 5,000 or more payable as compensation may be deposited on behalf of the person entitled |
| 81(3) | The authority's receipt is a sufficient discharge |
Procedure on a death deposit
- The authority, if he thinks necessary, causes notice to be published or served on each dependant, calling them to appear on a fixed date to decide the distribution (s.81(4)(a)).
- If after inquiry he is satisfied no dependant exists, he repays the balance to the employer (s.81(4)(b)).
- On the employer's application, he gives a statement of all disbursements (s.81(4)(c)).
- Compensation is apportioned by order among the dependants in such proportion as he thinks fit, or allotted to one dependant, but only after hearing the dependants and recording reasons (s.81(5)).
- If the money is payable to a person other than a woman or a person under disability, the authority may pay that person (s.81(6)).
- A lump sum for a woman or a person under disability may be invested, applied or dealt with for her or his benefit as the authority directs; half-monthly payments to a person under disability may be ordered to go to a dependant or another suitable person (s.81(7)).
Varying and recovering
The authority may vary an earlier order on distribution or investment where a parent neglects children, a dependant's circumstances change or for other sufficient cause (s.81(8)). No prejudicial order without a show-cause opportunity, and no order that would require a dependant to repay money already paid. Where payment was obtained by fraud, impersonation or improper means, the amount may be recovered as an arrear of land revenue, with the authority deemed a public officer under section 5 of the Revenue Recovery Act, 1890 (s.81(9)-(10)).
Central Rules
Rule 62(2) of the Central Rules, 2026 says money deposited with one competent authority under section 81 may be transmitted to another by remittance transfer receipt, e-transfer, net banking or demand draft. Venue and transfers are discussed in sections 91 and 92. The Central Rules apply where the Central Government is the appropriate Government; where the State Government is, the State's own rules apply.
A worked example
An employee dies in an accident, leaving a widow and two school-going children; monthly wages were Rs 20,000. The employer computes compensation under section 76 and deposits it with the competent authority, not with the widow. Before that, he gives the widow an advance of Rs 60,000 (three months' wages, the proviso cap). The authority hears the dependants, records reasons and apportions the sum, say 50 per cent to the widow and the rest for the children, and deducts the Rs 60,000 from the widow's share and repays it to the employer. The widow's share, being a lump sum to a woman, may be invested for her benefit as the authority directs. (Illustrative.)
Need help with a fatal accident claim?
Direct payments, advances, deposits and dependant hearings each have a precise legal effect. If you need guidance on handling a compensation deposit or a dependant dispute under sections 79 to 81, our legal consultation team can assist.
Key takeaways
- Half-monthly payments can be reviewed and continued, increased, decreased, ended or converted to a lump sum.
- Commutation by agreement at any time, or on application after six months of payments.
- Death compensation and lump sums for women and persons under legal disability go only by deposit with the competent authority.
- Advances to dependants up to three months' wages are allowed and recouped.
- Distribution is by reasoned order after hearing dependants; fraud can be recovered as land-revenue arrears.
Read next
- Section 76: Amount of compensation
- Sections 82 to 84: Notice, claim, special provisions and medical examination
- Sections 88 to 90: Statements, registration of agreements and reference to competent authority
- Dependants' benefit under ESI on death of an insured person
Disclaimer: Based on the Code on Social Security, 2020 (as enacted) and, where noted, the Code on Social Security (Central) Rules, 2026 (G.S.R. 344(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.