The central government is set to raise the automatic settlement limit for provident fund (PF) withdrawals from Rs 1 lakh to Rs 5 lakh, making it easier for employees to access their savings. The EPFO approved the proposal, which now awaits final clearance from the central board of trustees (CBT).
The central government is set to raise the automatic settlement limit for provident fund (PF) withdrawals from Rs 1 lakh to Rs 5 lakh, making it easier for employees to access their savings without delays. The Employees’ Provident Fund Organisation (EPFO) has decided to enhance the limit for automatic claim settlements to improve the ease of living for its 7.5 crore members. Labour and Employment Secretary Sumita Dawra approved the proposal during an EPFO executive committee meeting last week in Srinagar. The proposal now awaits final approval from the central board of trustees (CBT).
Faster and easier access to PF funds
Once the new limit is approved, EPFO members will be able to withdraw up to Rs 5 lakh through automatic processing, without manual intervention. The auto-settlement system was first introduced in April 2020 for medical emergencies, and in May 2024, the limit was increased from Rs 50,000 to Rs 1 lakh. The facility has since been extended to withdrawals for education, marriage, and housing.
Quicker processing, fewer rejections
At present, 95 percent of PF claims are processed automatically within three days, a significant improvement from the earlier 10-day timeline. The number of claim validation steps has also been reduced from 27 to 18, with plans to bring it down further to just six. The rejection rate for claims has dropped from 50 percent last year to 30 percent.
EPFO to introduce PF withdrawals via UPI and ATMs
In another major development, EPFO is working on allowing members to withdraw their PF through UPI and ATMs by May or June 2025. This feature may later be extended to other schemes such as the general provident fund (GPF) and public provident fund (PPF).
These reforms are part of EPFO’s broader efforts to simplify the PF withdrawal process, ensuring faster access to funds with minimal paperwork.
(With ANI inputs)
