EPF New Rule: Three categories of partial withdrawals have now been created: essential needs, residential needs, and special circumstances. The minimum service period for all types of partial withdrawals has been reduced to 12 months.
Several major decisions were made at the meeting of the Central Board of Trustees of the Employees’ Provident Fund Organization (EPFO) on October 13th. Some rules were relaxed, while others were tightened. The decisions that have generated the most discussion and concern are the extended period for full withdrawal of EPF funds and the requirement to maintain a minimum balance at all times. Let’s first discuss the rules that have been relaxed.
The Central Board of Trust (CBT) of EPFO has given a major relaxation in the rules for partial withdrawal to more than 7 crore members. Withdrawal up to 100 percent of the eligible amount has been approved. The Labour Ministry has said in a statement that now EPFO subscribers will be able to withdraw up to 100 percent of the eligible balance in their provident fund, including the employee’s and employer’s share, under partial withdrawal. Apart from this, the minimum service period for all types of partial withdrawal has been reduced to 12 months.
There is no need to provide reasons for withdrawal under special circumstances.
Along with this, 3 categories have been created to simplify the 13 complex provisions of partial withdrawal. These categories are essential needs like illness, education, marriage; residential needs and special circumstances. Now EPFO subscribers will be able to withdraw their EPF 10 times for education and 5 times in case of marriage. Till now this was possible only 3 times in both the cases. Now there will be no need to give any reason for withdrawing money in special circumstances. Earlier, reasons had to be given clearly, such as natural calamity, closure of establishment or company, continuous unemployment, outbreak of epidemic etc. Due to this, claims were often rejected.
But now you will never be able to keep your EPF account empty.
The EPFO has also mandated that members must maintain a minimum balance of 25 percent of their contribution amount in their EPF account at all times. This will help accumulate a retirement fund and ensure the continued accrual of interest. This minimum balance must be maintained in the EPF account at all times.
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