The government is going to make Provident Fund (PF) withdrawal easier. Now the limit of PF withdrawal under auto-settlement mode will be increased from Rs 1 lakh to Rs 5 lakh. This decision is being taken to give relief to 7.5 crore EPFO members.
According to the report of news agency ANI, Labor and Employment Ministry Secretary Sumita Daura has approved this proposal in a meeting held in Srinagar. Now it will be placed before the Central Board of Trustees (CBT) for final approval. After getting the approval, EPFO members will be able to withdraw up to Rs 5 lakh without any delay.
What is auto-settlement mode?
EPFO started the auto-settlement process during a medical emergency in April 2020. Later it was also implemented for other important expenses like education, marriage, and buying a house. In May 2024, the auto-settlement limit was increased from ₹ 50,000 to ₹ 1 lakh.
EPFO has reduced the number of verification formalities from 27 to 18 and plans to reduce it further to 6. This will speed up the process of claims and reduce the number of ineligible claims.
Claims are now being settled faster.
The auto-settlement mode has led to a tremendous increase in the settlement of claims.
As of March 6, 2025, 2.16 crore auto-settlement claims were settled, while in 2023-24 this figure was 89.52 lakh.
95% of the claims are being settled in just 3 days, whereas earlier it used to take up to 10 days.
The rejection rate of claims was 50% in 2024, which has now come down to 30%.
How will auto-settlement work?
EPFO has developed an IT-based automated solution, in which eligible claims are approved without any human intervention. Claims are accepted only when they meet KYC, bank account verification, and eligibility standards. In suspicious cases, claims are not rejected immediately, but a decision is taken only after a second-level investigation.
PF withdrawal from UPI also soon
EPFO is going to start the facility of PF withdrawal through the Unified Payments Interface (UPI) soon. After its implementation, members will be able to withdraw directly from the UPI platform and ATM, reducing the need for banking processes. This facility can be started by May or June 2025.
After the UPI withdrawal facility, similar improvements can be made in other savings schemes like the General Provident Fund (GPF) and Public Provident Fund (PPF). This will benefit employees across the country with quick and easy financial services.
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