EPFO has changed the rules for PF and pension withdrawal. Now, upon leaving a job, one will have to wait 12 months to receive the full PF amount and 36 months to withdraw the pension. Partial withdrawals for needs will remain as easy as before, while digital services and facilities for submitting life certificates have also been introduced.
EPFO Rules: EPFO has made significant changes to the rules for PF and pension withdrawals for its members. Now, upon leaving a job, one will have to wait 12 months to withdraw the full PF amount and 36 months for the pension amount. Partial withdrawals for needs such as illness, education, or home purchase will remain as easy as before. Improvements in digital services and facilities like online submission of life certificates have also been introduced.
Partial Withdrawals Made Easier When Needed
EPFO has simplified and integrated the rules for partial withdrawals. Now, if a member has an urgent need such as treating a serious illness, children's higher education, marriage, or buying a home, there is no need for a long wait. According to the new rules, you can withdraw money from your PF account for all these essential expenses after completing just 12 months of service. This change eliminates the previous complex rules, where 12 months of service was sufficient for illness, but a condition of at least five years of employment was required for buying a home.
25% of PF Account to Always Remain with EPFO
Another important condition has been added to the new rules. Now, 25 percent of your deposited PF amount will always remain with EPFO. This means you cannot completely empty your PF account. The organization argues that this rule is in the best interest of members. It ensures that people continue to benefit from an 8.25 percent interest rate on their deposits and that a minimum saving is secured at the time of retirement. However, the other side of this is that a significant portion of your hard-earned money will not be under your control for a long time.
Freedom from Digital Services and Paperwork Hassle
EPFO has promised to improve digital services. This will enable automatic settlement of PF and pension claims in the future without any paperwork. Furthermore, the 'Vishwas Yojana' (Trust Scheme) has been introduced. Its objective is to reduce litigation related to penalties for delays by employers in depositing PF. The facility for pensioners to submit digital life certificates from home has also been launched.
PF and Pension Withdrawal Became Difficult Upon Job Loss
The most concerning change has been made to the full withdrawal rule. Now, if an individual loses their job, they will have to wait 12 months to withdraw the full amount from their PF account. Previously, this rule was only 2 months, providing financial support during unemployment.
Similarly, pension withdrawal rules have also been made stricter than before. Previously, pensioners could withdraw the full amount within two months, but now they will have to wait 36 months, or a full three years, for this.
Impact of New Rules on Common Employees
The biggest impact of these changes will be on unemployed individuals and employees who have recently left their jobs. Now, they will have to wait a full 12 months to withdraw their PF. Additionally, pensioners will also have to wait up to three years to receive their amount. However, simplifying partial withdrawal rules has made it easier to withdraw money for essential expenses.
