1 April 2025
EPFO Proposes Enhanced Auto Settlement Limit and New Withdrawal Methods
The Employees' Provident Fund Organisation (EPFO), which manages the retirement funds of millions of Indian workers, is on the brink of introducing significant changes aimed at making life easier for its members. A recent proposal has been put forward to raise the auto settlement limit on advance claims from ₹1 lakh to a whooping ₹5 lakh. This change, once approved by the Central Board of Trustees (CBT), will allow EPFO members to access larger sums from their provident fund accounts more efficiently.
This recent development was agreed upon during the 113th Executive Committee meeting held in Srinagar on March 28, 2025. The meeting, led by Labour and Employment Secretary Sumita Dawra, marks a strategic move to enhance the 'Ease of Living' for its 7.5 crore members. If everything goes according to plan, withdrawals up to ₹5 lakh might soon be a reality through the Automated Settlement of Advanced Claims (ASAC) system, known for processing 95% of its claims swiftly within a span of three days.
The auto claim process was first introduced in April 2020, initially covering advances related to illness. Over time, it expanded to accommodate claims for education, marriage, and housing. This is not the first time the limits have been raised; for instance, it was previously increased from ₹50,000 to ₹1 lakh in May 2024. The intent is clearly to cater to a wider range of needs and simplify the withdrawal process, promoting greater flexibility for members in managing their finances.
Simplified Process and Upcoming Withdrawal Options
Another key area the EPFO is focusing on is the simplification of its claim validation procedures, which have been significantly reduced from 27 to just 18 steps. And it doesn't stop there; there's an ambitious plan to cut these steps down to just six, which speaks volumes about the organization's commitment to improving user experience.
Innovative withdrawal options are also on the horizon. By May or June 2025, EPFO members might be able to withdraw funds using Unified Payments Interface (UPI) and ATMs, pending approval from the National Payments Corporation of India (NPCI). This potential development could make access to provident fund money as easy as a regular bank withdrawal, offering instant availability of funds for those in need.
The EPFO's efficiency in processing auto-claims shines through the impressive numbers. As of March 6, 2025, a record 2.16 crore auto-claims were settled, reflecting a substantial jump from the 89.52 lakh processed in the financial year 2023-24. This remarkable increase is paired with a drop in claim rejection rates, as noted by Ramesh Krishnamurthi, the Central Provident Fund Commissioner, who highlighted that the current rejection rate is now down to 30% from a previous 50%.
With these promising changes, the EPFO is on track to not only streamline its processes but also to set a new standard for fund accessibility and member convenience. The advancements in withdrawal options and the ease of claims propose a future where managing provident funds is simpler and more user-friendly than ever before.
