EPFO Rules Changed: Out Of Job? Wait Time For Premature Provident Fund Settlement Explained
The Union government also announced a new requirement of keeping 25% of the contributions in the members’ account as minimum balance to be maintained by the member at all times.
The Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) on Tuesday approved simplified partial withdrawal rules, introduced a 25% minimum balance requirement, and extended the period for premature provident fund settlement to 12 months and premature pension withdrawal to 36 months. The meeting was chaired by Union Minister for Labour and Employment Dr Mansukh Mandaviya.
Until now, EPFO members could withdraw their full provident fund after being unemployed for two months, and premature pension withdrawals were also allowed after two months.
“The liberalisation of partial withdrawals ensures members can meet immediate financial needs without compromising their retirement savings or pension entitlements,” according to a media statement.
The board merged 13 existing partial withdrawal provisions into a single rule classified into three categories: essential needs, housing needs and special circumstances. Members can now withdraw up to 100% of the eligible balance in their provident fund accounts, including employee and employer contributions.
“Scheme provision simplification along with greater flexibility and zero need for any documentation will pave the way for 100% auto settlement of claims for partial withdrawal and ensure ease of living,” according to a statement.
Withdrawal limits for education and marriage have been liberalised, with education withdrawals allowed up to ten times and marriage up to five times. The minimum service requirement has been standardised at 12 months. Under the “Special Circumstances” category, members can apply without specifying reasons, removing previous delays and grievances, the statement said.
Minimum Balance Requirement
The board introduced a minimum balance rule, requiring members to maintain 25% of contributions in their accounts.
“This will enable the member to enjoy a high rate of interest offered by EPFO (presently 8.25% per annum) along with compounding benefits to accumulate a high-value retirement corpus. This rationalisation enhances ease of access while ensuring members maintain a sufficient retirement corpus,” according to the statement. The minimum balance requirement does not apply to those making premature withdrawals after losing their job.
The board also launched the Vishwas Scheme to rationalise penal damages and reduce litigation, approved a partnership with India Post Payments Bank to provide doorstep digital life certificate services for EPS’95 pensioners, and endorsed a comprehensive digital transformation framework under EPFO 3.0 to modernise services.
The statement noted that these measures will “enable faster, automated claims, instant withdrawals, multilingual self-service and seamless payroll-linked contributions, reaffirming EPFO’s commitment to transparent, efficient and technology-driven service delivery for over 30 crore members.”
