During the Covid pandemic, the EPFO relaxed certain norms for advance withdrawal by members in view of economic hardships faced in the country. But now with the pandemic over and normal lives back on the track, the EPFO has decided to discontinue the EPFO advance withdrawal facility with immediate effect.
EPF withdrawal rule: Every employee has to contribute 12% of his basic salary towards the provident fund run by the Employees Provident Fund Organization (EPFO). The employer then matches this contribution and deposits the amount with the retirement fund body. Of the 12% employer share, 8.33% goes towards retirement pension scheme and 3.67% towards provident fund.
Read More: EPF withdrawal clause: EPFO stops giving Covid-19 advance facility; check details
The EPFO has some fixed guidelines in place with regards to maturity withdrawal facility as well as advance payments to members during the working years from the corpus maintained by the body. Regarding advance withdrawal facility, the EPFO keeps introducing changes in its norms keeping in view different social and economic developments in the country. For example, during the Covid pandemic, the retirement fund body relaxed certain norms for advance withdrawal by members in view of economic hardships people faced in the country. But now with the pandemic over and normal lives back on track, the EPFO has decided to discontinue the COVID-19 advance withdrawal facility with immediate effect.
“As COVID-19 is no more a pandemic, the competent authority has decided to discontinue the said advance with immediate effect. This will be applicable to the exempted trusts also and accordingly may be intimated to all the Trusts coming under your respective jurisdictions,” the EPFO said in a recent statement.
Read More: EPF withdrawal clause: EPFO stops giving Covid-19 advance facility; check details
What was COVID-19 advance facility?
The EPFO had introduced the scheme as a non-refundable advance to the members of the retirement fund body when the pandemic first broke out in 2020. During the second wave in 2021, the retirement fund body relaxed norms further and allowed another advance for members struggling big time with their finances.
Under the COVID-19 advance facility, EPF members were allowed to withdraw an amount equivalent to three months’ basic wages, which includes basic pay and dearness allowance, or up to 75% of the balance in their provident fund account, whichever amount was lower. The COVID-19 advance facility was aimed at giving relief to employees as at that time many were grappling with issues like delayed salary, money crunch due to healthcare expenses and job loss. Under such circumstances, this move by the EPFO proved quite beneficial for members.
Read More: EPFO New Rules 2024: Good news for employers! EPFO cuts penal charges on THESE deposits
How did EPFO settle advance claims during pandemic?
The retirement fund body settled claims for availing advance to fight COVID-19 pandemic within three working days. After processing of the claims, cheque would be sent to the bank for crediting the amount to the bank account of the claimant. Banks usually took additional one to three working days to credit advance in members’ bank accounts.
What about other EPF withdrawal facilities?
The EPFO has made it clear that the members will continue to avail the option to withdraw from their account balance prematurely under specific conditions. The only condition is that members’ Universal Account Number (UAN) is activated and the phone number linked to UAN is functional. Following are the circumstances in which EPF members are eligible to make withdrawals:
- Purchase of house/flat/construction of house including acquisition of site.
- For marriage of self/daughter/son/brother/sister.
- For medical expenses related to the subscriber or a family member.
- For purchasing equipment for minimizing hardship on account of handicap.
- For post matriculation education of son/daughter.
- In the event of a natural calamity.
- To purchase equipment necessary for the subscriber’s physical disability.
- Partial withdrawal before retirement
- For investing in the Varishtha Pension Bima Yojana.
