EPFO Doubles Auto Claims Partial Withdrawal Limit for These Medical Expenses

The Employees' Provident Funds Organisation (EPFO) on April 16, 2024, announced an increase in the qualifying limit for auto claims processing under Paragraph 68J to Rs 1 lakh. The previous limit was Rs 50,000. This move allows EPF members to apply for premature withdrawal or advances to cover their own and their dependents' select medical costs. Under Paragraph 68J of the EPF Scheme, members can request a premature withdrawal from the fund for specific medical treatments, which include hospitalisation for one month or longer, major surgery in a hospital, or conditions such as Tuberculosis, leprosy, paralysis, cancer, mental illness, or a heart condition. “This is to inform you that the Competent Authority has approved the limit of auto claim settlements under para 68J from Rs 50,000 to Rs 1 lakh and the same was also deployed in the application software on April 10, 2024. This is for information and further necessary action of all,” EPFO said in the circular. Subscribers can claim for withdrawal of 6 months’ basic wages and DA (or employee share with interest) up to Rs 1 lakh, whichever is lower.

EPF Scheme & 68J

EPF contributions are mandatory for salaried employees, with both employees and their employers making equal contributions. While employees contribute 12 per cent of their wages to their EPF accounts, employers contribute 3.67 per cent to the EPF account and the remaining 8.33 per cent to the Employees Pension Scheme (EPS), which is a savings fund for their retirement. The interest rate of 8.25 per cent is now in effect and applies to EPF deposits.

Partial withdrawals are allowed to meet various financial needs, such as medical emergencies, education, home construction, and marriage. Additionally, it is tax-effective and allows them to take loans against their EPF funds.

Before April 2017, EPF members had to provide a proforma, medical certificate, etc to be eligible for an advance under paragraph 68-J, to get advances for medical needs. However, with the amendment in April 2017, members just have to submit a self-declaration for advances for medical needs.

Further, related to medical advances, physically impaired members can also apply for partial withdrawals under paragraph 68-N to buy equipment as support for their impairment.

How To Make Partial Withdrawals?

For EPF subscribers who want to make partial withdrawals, submitting EPF Form 31 online is the first step. Primarily verify your KYC details and service eligibility conditions by entering them after logging in to the member interface. Enter your bank account number and select ‘Verify’. click on ‘Proceed for Online Claim’, select the relevant claim and select Form 31. Enter details and submit.