Union Minister of Youth Affairs and Sports, and Labour and Employment, Mansukh Mandaviya, on Thursday clarified the substantial relaxations in the Employees’ Provident Fund Organisation (EPFO) rules.
These changes are aimed at simplifying the withdrawal process of Employees’ Provident Fund (EPF) and enhancing social security for employees, ANI reported, quoting the minister.
What is the new rule?
The major change targets employees who lose their jobs, making it significantly easier for them to access their savings while maintaining their service record.
Employees can now immediately withdraw 75% of their EPF amount upon losing their employment. The remaining 25% can be withdrawn after one year, ensuring that the employee’s 10-year service tenure is not disrupted, thereby maintaining their eligibility for a pension and ensuring social and economic security.
тАЬ…EPF withdrawal has been made simpler now…If someone loses their job, then 75% of the amount can be withdrawn immediately, and after one year, the facility to withdraw the entire amount will be available. The idea behind retaining 25% amount for a year is that the 10-year service tenure is not disrupted. With these new reforms, the employee’s service continuity will be maintained, and receiving a pension will ensure their social and economic security,тАЭ Mandaviya told ANI.
Extended window for fund withdrawal
In addition to the revised withdrawal limits, the government has also extended the period in which members can withdraw their funds after job loss.
The period is stretched from the previous two months to one year, allowing members with more time to secure new employment and maintain job continuity.
New steps to boost enrolment
To broaden the scope of social security benefits, the government has introduced a measure to encourage establishments that previously did not contribute to EPFO to enrol. These establishments can now register with a nominal penalty, making it easier for more employees to come under the EPFO umbrella.
Furthermore, to assist elderly and remote EPFO beneficiaries, the government has established a partnership. A Memorandum of Understanding has been set up with postal services to facilitate the authentication and issuance of life certificates at the beneficiaries’ homes. This initiative eliminates the need for beneficiaries to visit EPFO offices, ensuring they can receive their benefits conveniently, ANI reported.
