The Employees’ Provident Fund Organisation (EPFO) introduced sweeping changes, significantly altering the landscape of how members access and manage their retirement savings.
These new rules were approved by the EPFO board and seek to balance ‘ease of access’ with ‘financial prudence’. The changes streamline operations, increase liquidity, and advance EPFO’s digital transformation.
What are the changes?
Under the old rules, withdrawals were strictly purpose-based, limited to specific needs like housing, education, marriage, or illness, and required different eligibility norms, service requirements, and capped amounts.
The new rules permit members to withdraw up to 100% of their ‘eligible balance’ (including both employee and employer contributions) for specified needs. The big change is the introduction of a 25% balance floor. This mandates that a minimum of 25% of the EPF corpus must always remain in the account. This minimum retention rule ensures members maintain a base amount that continues to earn a high rate of interest (currently 8.25%) and benefits from compounding, thereby supporting long-term savings. Previously, there was no minimum retention requirement.
Categories: The 13 previous withdrawal categories have been consolidated into just three: Essential needs (illness, education, marriage), Housing needs, and Special Circumstances.
Withdrawal Limits: The maximum number of partial withdrawals has been increased in certain areas; for instance, members can now withdraw up to 10 times for education and 5 times for marriage.
Documentation: Proofs required have been reduced, with self-declaration now allowed for many claims, speeding up approvals.
Digital Integration: The EPFO is pushing a digital-first system, including automatic transfers between jobs (if UAN and Aadhaar are linked), a unified ‘Passbook Lite’, and an increased auto claim settlement limit to ₹5 lakh (up from ₹1 lakh). Verification will eventually include face authentication starting August 2025.
How soon can you withdraw funds if you find yourself unemployed?
The old rule allowed for final settlement (full withdrawal after unemployment) after only two months. The new rule extends this waiting period significantly:
EPF Final Settlement: Extended from two months to 12 months of unemployment.
EPS Withdrawal: The waiting period https://tuv.cfga.gov.mn/
for the Employees’ Pension Scheme (EPS) withdrawal has been extended to 36 months.
The minimum service period required for various withdrawals, which previously varied between 5 and 7 years depending on the purpose, is now standardised to 12 months.
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