EPFO Claim Limit Likely To Increase From Rs 1 Lakh To Rs 5 Lakh, Says Report

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

The recommendation will now be presented for approval to the CBT

Source : ABPLIVE AI

The Employees Provident Fund Organisation (EPFO), under the central government, is likely to raise the auto settlement of advanced claims (ASAC) limit to Rs 5 lakh, up from the current limit of Rs 1 lakh, according to a report by news agency ANI released on Monday, citing sources familiar with the development.

Sumita Dawra, Secretary of the Ministry of Labour and Employment, has reportedly approved the proposal to increase the withdrawal limit during the 113th meeting of the Executive Committee (EC) of the Central Board of Trustees (CBT), which took place last week, according to the news agency.

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

The recommendation will now be presented for approval to the CBT. Once approved, EPFO members will be eligible to claim their provident fund (PF) up to Rs 5 lakh through the ASAC process.

What Is An Auto EPFO Claim

The EPFO introduced the auto claim settlement process in April 2020, initially allowing advance claims up to Rs 50,000 for cases of illness. In May 2024, the limit for auto settlement of advance claims was increased to Rs 1 lakh.

Originally, EPFO members could withdraw their provident fund only for illness or hospitalisation-related expenses. However, the organisation has expanded the auto claim settlement facility to cover three additional categories: education, marriage, and housing.

According to reports citing sources familiar with the matter, the rejection rate of EPFO claims has significantly decreased from 50 per cent last year to 30 per cent currently. The auto-claim system processes EPFO claims automatically through an IT-driven mechanism, eliminating the need for manual intervention.

Validation Formalities

Sources noted in the report that the validation formalities required for withdrawing provident fund (PF) have been significantly reduced. The current validation rate stands at 18 per cent, down from the previous 27 per cent, and it was further decided in last week’s meeting to reduce it to just 6 per cent.

Additionally, the central government is making efforts to simplify and centralise member databases through the Centralised IT-Enabled System.

At present, claims that meet KYC, eligibility, and bank validation criteria are processed automatically using IT tools. This automation has led to a notable reduction in the claim settlement period, which now takes just 3 to 4 days, compared to the earlier processing time of around 10 days.