In a move aimed at enhancing the Ease of Living for employees, the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) has approved major reforms to simplify and liberalize partial withdrawal provisions under the EPF Scheme. The move merges 13 complex rules into one streamlined framework.

1. Simplified Framework into Three Categories

The EPF partial withdrawal rules have been reorganized into three easy-to-understand categories — Essential Needs (illness, education, marriage), Housing Needs, and Special Circumstances. This replaces the earlier maze of 13 separate provisions, making the process simpler and more transparent.

2. Higher Withdrawal Limits

Members can now withdraw up to 100% of the eligible Provident Fund balance, including both employee and employer contributions. The limit for education-related withdrawals has been raised to 10 times, and for marriage, up to 5 times — compared to the earlier combined limit of only 3 withdrawals for both purposes.

3. Reduced Minimum Service Requirement

The minimum service period needed to become eligible for any partial withdrawal has been uniformly reduced to 12 months, compared to varying timelines earlier.

4. No Reason Needed for ‘Special Circumstances’

Previously, withdrawals under ‘Special Circumstances’ required members to justify the reason — such as natural calamity, unemployment, or epidemic — often leading to claim rejections. Now, members can withdraw funds without assigning any reason, ensuring faster access to money.

5. New Minimum Balance and Settlement Ease

Members must now maintain 25% of contributions as a minimum balance to preserve their retirement corpus and continue earning EPFO’s high interest rate of 8.25% p.a.. The entire process will be document-free and 100% auto-settled, ensuring faster claim disbursals. Additionally, premature final settlement and pension withdrawal timelines have been extended to promote long-term savings.

Source: News18