EPF: Auto settlement of advance withdrawal raised from Rs 1 lakh to Rs 5 lakh

Kolkata: Quick auto-settlement for withdrawal of advances to withdrawing EPF money from ATMs just like debit and credit cards -- EPF is undergoing a transformation from an opaque, bureaucracy-driven organization to a quick service platform. This metamorphosis received a further boost with Union labour minister Mansukh Mandaviya announcing on June 24 that EPFO (Employees' Provident Fund Organisation) is raising the limit of auto-settlement on advance withdrawal by 500% -- from Rs 1 lakh to Rs 5 lakh.

aAs a result, EPFO members will be able to get this amount in their bank accounts within a maximum window 72 hours from applying for it. "The EPFO has increased auto-settlement limit for advance claims from Rs 1 lakh to Rs 5 lakh to facilitate faster fund access for EPFO members, especially in times of urgent needs," Mandaviya told reporters here. The number of individuals who might be benefitted is huge since EPFO has over 70 million members.

Auto-settlement means these payments are made without any human intervention in the process after application. The auto-settlement process was launched when the Covid 19 pandemic was ravaging the country and EPFO members had to tap into their retirement funds to keep their heads above water.

The conditions in which advance withdrawals are allowed by EPFO are the following:

Marriage: One can withdraw money for own marriage, marriage of one's kids and sibling. An employee must complete a minimum of 7 years in service to do this.

Medical treatment: One can withdraw money for serious illness such as cancer, TB, heart ailment, leprosy, paralysis or mental derangement. There is no minimum duration of service to avail of this facility.

Education expenses: It can be for the employee's own education or that of children. A minimum of seven years of service is needed in this case.

Home Loan Repayment: If you are buying a house/flat in your name or jointly with your spouse. One has to complete 10 years of employment for this.

Building a house: You must be constructing a house on a plot of land in your own name, your spouse's name or jointly of both. You must have completed five years in service.

House repair: The house must be owned by you or with your spouse jointly. You have to complete five years of service.

Company lockout: If the company shuts shop, and if you are not paid salary for at least two months, you can choose to apply. There is no condition for minimum number of years in service.

Physically handicapped members: If an EPFO member is physically handicapped he/she can apply for advance withdrawal to buy an equipment to help in his/her condition.

Natural calamity: One needs to apply within four months. One has to submit a certificate of damage issued by an appropriate authority or declaration from the State Government about the calamity.

According to EPFO data, the retirement funds managing body processed as many as 2.34 crore advance claims through the auto-settlement route. This was a huge 1.61 times more than 89.52 lakh claims handled in the year before. Moreover, the popularity of the auto-settlement mode is quite evident from the fact that 59% of all advances were claimed through the auto-settlement mode in FY25 compared to 31% in 2023-24. The minister also said that between April 1 and June 15, as many as 76.52 lakh claims were auto-settled by EPFO, which is 70% of all the advance claims.

EPFO is also expected to kick off its much-discussed step of making money in EPF accounts available through bank ATMS. The work on this project is nearly complete and waiting for rollout.