EPFO Update: EPFO Clears PF Withdrawal Issues After Job Exit, Know the New Rules

A clarification by the Employees’ Provident Fund Organization (EPFO) on Wednesday gave relief to employees planning to leave their jobs and start their own business. Earlier, it was said that the full PF amount could only be withdrawn after 12 months of leaving a job.

Major Changes in Rules

EPFO has made important changes to PF withdrawal rules. Now, if an employee loses a job or is dismissed, they can withdraw funds from their PF account after 12 months. Withdrawals from the pension account (EPS) are allowed after 36 months. Earlier, the limit was only two months for both funds, which caused confusion and protests.

Under the new rules, an employee can withdraw 75% of the PF amount immediately after leaving the job. The full amount can be withdrawn after one year of unemployment. EPFO also said that the withdrawal limit for education or unemployment is now flexible. In special cases, the full eligible amount can be withdrawn twice a year without any questions.

EPFO: Important Questions and Answers on New PF Withdrawal Rules

1. What were the previous rules for PF withdrawals after leaving a job?

Earlier, if an EPFO member was unemployed for two months, they could withdraw the full amount from their PF and Pension (EPS) accounts. Now, this period has been extended.

2. What are the new rules?

Now, 75% of the PF amount can be withdrawn immediately after leaving the job. The remaining amount can be withdrawn after one year.

3. Why did EPFO change the rules?

EPFO said that withdrawing the full amount after two months breaks the service period. Ten years of continuous service is needed for pension. Repeated withdrawals may reduce service years and stop the employee from getting pension benefits.

4. What benefits will the new rules bring?

The new rules stop people from withdrawing PF and pension funds too early. By extending the withdrawal period, fewer members will close their PF accounts. This keeps their accounts linked under one UAN (Universal Account Number) and counts toward their service period, keeping them eligible for pension.

5. How much can members withdraw from their PF accounts?

25% of a member’s PF is reserved as a retirement fund. Members can withdraw 100% of their eligible balance after 12 months of service.

6. What are the rules for partial withdrawals?

Employees can now withdraw money for purposes like marriage or housing once a year. Earlier, this limit was 5–7 years. In special cases, withdrawals can be made easily without documents.