The Employees' Provident Fund Organisation on June 14, 2024, announced that the advance facility allowed about the Covid-19 pandemic has been discontinued with immediate effect. The provision to withdraw a non-refundable advance from an EPFO account was introduced in 2020 during the first wave of the pandemic and then followed by another advance later during the second wave in 2021. The provision allowed eligible members to make a non-refundable withdrawal to the extent of the basic wages and dearness allowances for three months or up to 75 per cent of the amount standing to their credit in the EPF account — whichever is less.
“As COVID-19 is no longer a pandemic, the competent authority has decided to discontinue the said advance with immediate effect. This will apply to the exempted trusts also and accordingly may be intimated to all the Trusts coming under your respective jurisdictions," read the EPFO circular.
Further, the Ministry of Labour and Employment in another release stated that EPFO is currently revamping its application software with the UAN-based single accounting system for each EPFO member. Further, the automation of process flow with minimum human intervention is also being undertaken for faster settlement of claims.
Sumita Dawra, Secretary, Ministry of Labour & Employment, commended the recent steps of EPFO to automate the claim settlement and reduce the rejections of claims. The claim settlement speed has improved, with the majority of them being settled within three days, the ministry said. The auto settlement of advances up to Rs 1 Lakh for illness, education, marriage and housing has been implemented by EPFO in April 2024. As of June 14, 2024, around 25 lakh advance claims have been settled on auto mode. Over 50 per cent of the illness claims settled till now have been settled on auto mode.
EPF Scheme & Advances
Enrolling in the EPF scheme is mandatory for private companies that have over 20 employees. Employees have to contribute up to 12 per cent of their monthly salary, which has to be matched by an equal contribution from employers.
The contributions will receive an interest rate of 8.25 per cent per annum and contributions plus interest can be withdrawn upon retirement. Premature withdrawal is allowed up to the extent mentioned above for constructing a house, post-matriculating children's education, marriage, treatment expenses etc. They have to submit EPF Form 31 online after clicking on ‘Proceed for Online Claim’, entering their bank account number and selecting the relevant claim on the EPF portal.
