EPFO has decided to increase the Advance Settlement Auto Claim (ASAC) limit from ₹1 lakh to ₹5 lakh, benefiting 75 million members. This will make the process of withdrawing funds for education, marriage, and housing purposes easier. With the automated system, the PF withdrawal process will now be completed within three days. The claim rejection rate has also decreased from 50% to 30%.
In a bid to improve the 'Ease of Living' for its 75 million members, EPFO has increased the ASAC limit fivefold, from ₹1 lakh to ₹5 lakh. This decision was approved during the 113th Central Board of Trustees (CBT) meeting, which took place last week, under the chairmanship of Sumita Daware, Secretary of the Ministry of Labour and Employment. The meeting was held on March 28 in Srinagar, Jammu & Kashmir, and was attended by EPFO’s Central Provident Fund Commissioner, Ramesh Krishnamurthy. The proposal will now be sent to the CBT for final approval. Once approved, EPFO members will be able to withdraw up to ₹5 lakh as PF advances through the auto-settlement mode (ASAC).
The auto-settlement system for PF advances was first introduced in April 2020 for illness-related claims. In May 2024, EPFO raised the auto-settlement limit from ₹50,000 to ₹1 lakh. Now, EPFO has extended this auto-settlement feature to include claims for education, marriage, and housing. Earlier, members could only withdraw funds in cases of illness or hospitalization. The automated claims are processed within three days, and now 95% of the claims are processed automatically.
EPFO achieved a significant milestone by processing 21.6 million auto-claims by March 6, 2025, the highest number so far. In the 2023-24 financial year, this number stood at 8.95 million. According to sources, the claim rejection rate has reduced from 50% to 30%. The system is now fully automated, with IT tools processing claims without any human intervention. EPFO has also reduced the validation processes from 27 steps to 18 and plans to bring them down to just six in the future. Additionally, upfront validation processes have been developed to prevent members from filing incorrect claims by providing eligibility information in advance.
The claim settlement process is now faster and more efficient. With the centralized IT system, all member data is linked in one place, enabling complete digital processing of claims. Once KYC, eligibility, and bank verifications are completed, the IT tools automatically process the claims. This has reduced the claim settlement time from 10 days to just 3-4 days. Claims that do not pass the verification process are not rejected outright but are sent for a secondary review and approval process.
