The withdrawal framework under EPFO 3.0 has been revised, with an aim to make things simpler, and give long-term financial security to over 30 crore members. There is a major shift on how an employee can withdraw PF, especially during employment and unemployment.

What are the rules?

Earlier there were 13 very confusing provisions for withdrawal, it has been merged to just three important categories- Housing Needs, Essential Needs, and Special Circumstances. This step has been taken to get rid of delays, and inconsistencies members face while applying for withdrawals.

The new structure allows members to withdraw up to 100% of their eligible balance as per the reasons, however a minimum of 25% corpus needs to be maintained in the account.

What are the Eligibility and Limits?

Previously the limit was set as per reasons- at least 7 years of employment for application related to marriage, 5 years for housing needs, but now there is a uniform cap of 12 months minimum service requirement for partial withdrawal. In the case of the ‘Special Circumstances’ category earlier there was a need to submit the proof of emergency, that has now been removed and there is no need for document submission. Even the withdrawal limit has been extended, 10 withdrawals related to education, 5 related to marriage.

Stricter Rules for Job Loss Withdrawals

In a strict move, now settlement after job loss has been increased from 2 months to 12 months. This clearly means that a person has to wait for a year before withdrawing the funds. However, partial withdrawal still is possible post a month of unemployment. Besides, pension withdrawal can also be done after 36 months of unemployment. EPFO Commissioner Ramesh Krishnamuthy said, “The idea is to help subscribers continue earning interest on their savings and preserve pension benefits,”. He further added that the reform is to encourage savings and give security post-retirement.

Understanding the hassle of withdrawal, EPFO is also working to make auto-processing of partial withdrawal claims easy.

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