The Employees' Provident Fund Organization (EPFO) has made some changes in the rules for crores of its members, which can become a problem for the recently unemployed people. In fact, in the meeting of the Central Board of Trustees held under the chairmanship of Labor Minister Mansukh Mandaviya on Monday, many major decisions were taken regarding the process of withdrawing money from the Provident Fund (PF). While there is some good news in these decisions, there are also some conditions which can increase the difficulties of employed people, especially the unemployed.
First of all let's talk about good news. EPFO has simplified and unified the rules for partial withdrawal i.e. withdrawing money from PF account when needed. Now if you need money for any emergency, such as treatment of serious illness, children's higher education, marriage or buying your dream house, you will not have to wait long. Under the new rule, you will be able to withdraw money from your PF account for all these works only after completion of 12 months of employment. This is a big relief, because earlier there were different conditions for different needs. For example, 12 months' service was sufficient for illness, but for major expenses like buying a house, it was mandatory to remain in the job for at least five years. Now this hassle has been eliminated, which will make it easier for members to meet their immediate needs.
Now let's look at those decisions which can increase your anxiety. A major condition added in the new rules is that 25 percent of your own contribution deposited in your PF account should always remain in the account. That is, you will never be able to empty your account completely, one fourth of the amount will always remain with EPFO. The organization argues that this rule is in the interest of the members. This will ensure that people continue to enjoy an attractive interest rate of 8.25% on their deposits and always have a secure minimum savings for retirement. However, the flip side of this is that a large part of your own hard-earned money will remain away from your hands for a long time and you will not be able to use it as per your wish.
The most worrying change has been made in the rule of complete withdrawal, which will have a direct impact on those who lose their jobs. The rule till now was that if a person became unemployed, he could withdraw the entire amount deposited in his PF account after waiting for two months. This rule used to be a big economic support in the difficult times of unemployment. But now this period has been increased to 12 months. This means that even after leaving the job, you will have to wait for a full year for your PF money.
Similarly, the rules for withdrawing pension amount have also been made more strict than before. Whereas earlier you could withdraw your entire pension amount after two months, now you will have to wait for 36 months i.e. three years.
Along with this, EPFO has promised to improve its digital services, so that in future claims will be settled automatically without any paperwork. Apart from this, 'Vishvas Yojana' has been launched, which aims to reduce litigation related to penalty imposed by employers on delay in depositing PF. Besides, the facility to submit free digital life certificate at home has also been started for pensioners.
