Now You Can Withdraw 75% Of Your PF Amount After One Month Of Leaving Job: Know About The Changes
The Logical Indian Crew India
June 29th, 2018 / 5:34 PM
In a move aimed at enhancing ease of subscribers, and ensuring adequate social security cover is provided, Employees’ Provident Fund Organisation (EPFO) has said that its 5.5 million subscribers can withdraw 75% of their total provident fund (PF) amount after one month of unemployment or leaving their job.
The decision was taken on Tuesday, in a Central Board of Trustees (CBT) meeting that was held under the chairmanship of Union minister of state for labour and employment (independent charge) Santosh Kumar Gangwar. CBT is the highest decision-making body of EPFO and it comprises an equal number of representatives of employees, employers and state government representatives.
The body is of the view that allowing 75% withdrawal after a month of job loss would meet the financial requirements of the entitled person to a great extent.
Under this new provision, the subscriber will now have an option to withdraw the rest of the 25 per cent of their funds after completion of two months of unemployment.
“We have decided to amend the scheme to allow members to take advance from its account on one month of unemployment. He can withdraw 75 per cent of its funds as an advance from its account after one month of unemployment and keep its account with the EPFO,” said Labour Minister Santosh Kumar Gangwar after the meeting.
Currently, an EPFO subscriber can withdraw the accumulated funds from their PF after two months of unemployment and settle the account in one go. As a result, many members end up removing the entire amount. This leads to closure of the PF account and hence no social security cover is there for the subscribers.
As reported by the Economic Times, “EPF Scheme 1952 does not have provision for advance to members during such kind of non-employment, and the scheme allows only full and final settlement. This compels members to withdraw entire amount. Such early closure of membership also goes against the objective of providing social security to the members and family,” CBT agenda note said.
However, now the new amendment would give an option to subscribers to keep their account with the EPFO, which they can use after regaining employment.
“We are trying to give subscribers a window to take out a sizable portion of the corpus, yet not close the account. When he gets a new job, he can transfer the old account money to the new account with the new employer,” said central PF commissioner V.P. Joy, reports Livemint.
Initially, it was proposed that the members would be allowed to take 60 per cent of funds after 30 days. But, the CBT raised the limit to 75 per cent in the meeting held on June 26.
Written by : Ridhima Gupta
Edited by : Abhinav Joshi