EPFO simplifies its withdrawal rules, allows up to 100% withdrawal of EPF balance

Central Board of Trustees (CBT), of Employees Provident Fund Office (EPFO) took a number of path-breaking decisions aimed at simplification and liberalization of EPF partial withdrawal provisions. In a key provision to enhance Ease of Living of EPF members, CBT decided to simplify the partial withdrawal provisions of EPF Scheme by merging 13 complex provisions into a single, streamlined rule categorized into three types namely, Essential Needs (illness, education, marriage), Housing Needs and Special Circumstances.

Now, members will be able to withdraw upto 100% of the eligible balance in the Provident Fund including employee and employer share.

Withdrawal limits have been liberalized—education withdrawals allowed up to 10 times and marriage up to 5 times (from existing limit of total of 3 partial withdrawals for marriage & education in all).

Requirement of minimum service has been uniformly reduced to only 12 months for all partial withdrawals.

Earlier, under ‘Special Circumstances,’ the member was required to clarify the reasons for partial withdrawals viz. natural calamity, lockouts/closure of establishments, continuous un-employment, outbreak of epidemic etc. This often led to rejection of claims and consequent grievances. Now, the member can apply without assigning any reasons under this category.

A provision has been made for earmarking 25% of the contributions in the Members’ account as Minimum Balance to be maintained by the member at all times. This will enable the member to enjoy high rate of interest offered by EPFO (presently 8.25% pa) along with compounding benefits to accumulate a high value retirement corpus. This rationalization enhances ease of access while ensuring members maintain a sufficient retirement corpus.

Scheme provision simplification along with greater flexibility and zero need for any documentation will pave the way for 100 % auto settlement of claims for partial withdrawal and ensure ease of living.

It is also decided to change the period for availing premature final settlement of EPF from the existing 2 months to 12 months and final pension withdrawal from 2 months to 36 months. The liberalization of partial withdrawals ensures members can meet immediate financial needs without compromising their retirement savings or pension entitlements.

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