EPFO has made many rules easy after their latest discussions. The officials are trying to make the money withdrawal process as easy as possible. With the latest updates, consumers will be happy to know that the EPFO money withdrawal process has now become easier. But can you withdraw all of your money from the account?
What are the latest rules?
In a meeting held on Monday, the EPFO’s Central Board of Trustees (CBT), chaired by Labor Minister Mansukh Mandaviya, approved several key decisions. The most significant change is that the rules for partial withdrawals from EPF have been completely simplified and made flexible. Previously, there were 13 separate and complex rules, which have now been consolidated into three categories—
1. Essential needs such as illness, education and marriage
2. Housing Needs
3. Special circumstances.
Can you withdraw 100% money?
Employees will now be able to withdraw 100% of their account balance, including both the employee and employer portions. Withdrawal limits have been increased to 10 times for education and 5 times for marriage. Previously, only three withdrawals were permitted. Previously, a minimum of five years of service was required for any partial withdrawal, but this has now been reduced to just 12 months.
Previously, in cases of “special circumstances,” members were required to provide a reason—such as a natural disaster, pandemic, unemployment, or lockdown. This resulted in many claims being rejected. Now, withdrawals in this category can be made without providing a reason. The EPFO ​​has also decided that 25% of the funds will always remain in the member’s account as a “minimum balance,” allowing them to earn 8.25% interest and the benefit of compounding. This means that they will retain the freedom to withdraw funds when needed, while also maintaining the benefits of their retirement funds.
EPFO says that now 100% of partial withdrawal claims will be settled automatically, that too without any documentation. Furthermore, the final settlement rules have also been changed – now premature settlement of PF can be done in 12 months instead of 2 months, and pension withdrawal can be done in 36 months instead of 2 months. The meeting also approved the “Vishwas Scheme”, which aims to reduce litigation in penalty cases. Now the penalty on late PF deposits will be only 1% per month.
