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Centre to Increase Auto-Settlement Limit for PF Withdrawals to Rs 5 Lakh
ECONOMY & POLICY

Centre to Increase Auto-Settlement Limit for PF Withdrawals to Rs 5 Lakh

In a major move to enhance the Ease of Living for its 7.5 crore members, the Employees’ Provident Fund Organisation (EPFO) has decided to increase the limit for auto-settlement of advance claims (ASAC) from Rs1 lakh to Rs 5 lakh, sources told ANI.

According to insiders, Sumita Dawra, Secretary, Ministry of Labour and Employment, approved the proposal in the 113th meeting of the Executive Committee (EC) of the Central Board of Trustees (CBT), held in Srinagar on March 28, 2025. The proposal now awaits final approval from the CBT, after which EPFO members will be able to withdraw up to Rs 5 lakh through ASAC.

Enhancements in Auto-Settlement Process The auto-mode claim settlement was first introduced in April 2020 for advance withdrawals related to illness.

In May 2024, the EPFO doubled the limit from Rs 50,000 to Rs 1 lakh.

The scope of auto-settlement has now been expanded to include education, marriage, and housing, beyond just illness/hospitalisation.

95% of claims are now processed automatically, with the claim settlement period reduced from 10 days to just 3-4 days.

Record-Breaking Claim Settlements & Reduced Rejections EPFO achieved a historic high of 2.16 crore auto-claim settlements as of March 6, 2025, up from 89.52 lakh in 2023-24.

The claim rejection ratio has improved, dropping from 50% last year to 30%.

Validation formalities for PF withdrawals have been streamlined, reduced from 27 steps to 18, with plans to further cut them to just 6.

Upcoming UPI & ATM-Based PF Withdrawals In a groundbreaking move, the EPFO is set to introduce Provident Fund (PF) withdrawals via UPI and ATMs. The Ministry of Labour and Employment has approved NPCI's recommendation, and members may be able to withdraw PF through UPI or ATMs by May or June 2025. This initiative could also serve as a pilot for General Provident Fund (GPF) for government employees and Public Provident Fund (PPF) in banks.

This series of reforms highlights the EPFO's commitment to making provident fund access faster, simpler, and more efficient for millions of Indian workers.

In a major move to enhance the Ease of Living for its 7.5 crore members, the Employees’ Provident Fund Organisation (EPFO) has decided to increase the limit for auto-settlement of advance claims (ASAC) from Rs1 lakh to Rs 5 lakh, sources told ANI. According to insiders, Sumita Dawra, Secretary, Ministry of Labour and Employment, approved the proposal in the 113th meeting of the Executive Committee (EC) of the Central Board of Trustees (CBT), held in Srinagar on March 28, 2025. The proposal now awaits final approval from the CBT, after which EPFO members will be able to withdraw up to Rs 5 lakh through ASAC. Enhancements in Auto-Settlement Process The auto-mode claim settlement was first introduced in April 2020 for advance withdrawals related to illness. In May 2024, the EPFO doubled the limit from Rs 50,000 to Rs 1 lakh. The scope of auto-settlement has now been expanded to include education, marriage, and housing, beyond just illness/hospitalisation. 95% of claims are now processed automatically, with the claim settlement period reduced from 10 days to just 3-4 days. Record-Breaking Claim Settlements & Reduced Rejections EPFO achieved a historic high of 2.16 crore auto-claim settlements as of March 6, 2025, up from 89.52 lakh in 2023-24. The claim rejection ratio has improved, dropping from 50% last year to 30%. Validation formalities for PF withdrawals have been streamlined, reduced from 27 steps to 18, with plans to further cut them to just 6. Upcoming UPI & ATM-Based PF Withdrawals In a groundbreaking move, the EPFO is set to introduce Provident Fund (PF) withdrawals via UPI and ATMs. The Ministry of Labour and Employment has approved NPCI's recommendation, and members may be able to withdraw PF through UPI or ATMs by May or June 2025. This initiative could also serve as a pilot for General Provident Fund (GPF) for government employees and Public Provident Fund (PPF) in banks. This series of reforms highlights the EPFO's commitment to making provident fund access faster, simpler, and more efficient for millions of Indian workers.

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