Good news for PF investors, Govt likely to increase EPFO claim limit from ₹1 lakh to ₹5 lakh: Report

The Central government's Employees Provident Fund Organisation (EPFO) has decided to likely increase the auto settlement of the advanced claim (ASAC) limit to ₹5 lakh, compared to its current levels of ₹1 lakh, reported the news agency ANI, citing people aware of the development on Monday, March 31.

Sumita Dawra, Secretary of the Ministry of Labour and Employment, reportedly approved the proposal to increase the withdrawal limit in the 113th meeting of the Executive Committee (EC) of the Central Board of Trustees (CBT), held last week, reported the news agency.

Ramesh Krishnamurthi, Central Provident Fund Commissioner of EPFO, also attended the meeting held in Srinagar on March 28, as per the report.

The recommendation will need to go for approval of the CBT, and after the approval, the EPFO members will be eligible to claim their provident fund (PF) up to ₹5 lakh through the ASAC.

Auto EPFO Claim

EPFO introduced the auto claim settlement in April 2020 with a claim limit of ₹50,000 for advance eligibility in case of an illness. In May 2024, auto settlement of the advanced claim limit was increased to ₹1 lakh.

The EPFO members were able to withdraw their provident fund for illness or hospitalisation purposes only, but the organisation has also introduced the auto-mode settlement of advance claims for three categories: education, marriage, and housing.

The rejection of the EPFO claims has dropped to 30 per cent from its 50 per cent levels last year, reported the agency, citing people aware of the development. Now in the auto-claim solution, the EPFO claims are processed automatically by an IT system without any human intervention.

The sources also told the news agency that the validation formalities for withdrawing PF have also been reduced to 18 per cent, compared to its previous levels of 27 per cent and in the meeting last week, it was further decided to be brought down to 6 per cent.

The central government is also working towards simplification and centralization of the member databases under the Centralized IT Enabled.

Currently, any claims with KYC, eligibility, and bank validation are processed automatically by the IT tools, as a result of which, the period of claim settlement has dropped to 3 to 4 days compared to its previous levels of 10 days settlement.

LiveMint couldn't independently verify the report.

(This is a developing story. Please check back for updates.)