EPF withdrawal simpler now? Union minister Mansukh Mandivya says cash out 75% if job is ‘lost’

Union Minister of Youth Affairs and Sports, and Labour and Employment, Mansukh Mandaviya, on Wednesday highlighted the substantial relaxation in the Employees' Provident Fund Organisation (EPFO) rules, making EPF withdrawal simpler for employees.

According to the new rules, employees who lose their jobs can now withdraw 75% of their EPF amount immediately. The remaining 25% can be withdrawn after one year, ensuring that the employee's 10-year service tenure remains intact.

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Mandaviya said, “...EPF withdrawal has been made simpler now...If someone loses their job, then 75% of the amount can be withdrawn immediately, and after one year, the facility to withdraw the entire amount will be available. The idea behind retaining 25% amount for a year is that the 10-year service tenure is not disrupted. With these new reforms, the employee's service continuity will be maintained, and receiving a pension will ensure their social and economic security.”

Additionally, the government has extended the period for withdrawing funds after job loss from two months to one year, allowing members more time to find new employment and maintain job continuity.

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In another significant move, establishments that have not previously contributed to EPFO can now enrol with a nominal penalty, encouraging more employees to benefit from social security.

Furthermore, to assist elderly and remote EPFO beneficiaries, an MoU has been established with postal services to facilitate the authentication and issuance of life certificates at their homes. This ensures that beneficiaries can receive their benefits without needing to visit EPFO offices.

Opposition slams Centre

The opposition criticised the government for extending the waiting period for premature final EPF settlement from the current two months to 12 months, and for delaying final pension withdrawal eligibility from two months to 36 months.

They also objected to the new rule requiring 25% of the members’ EPF contributions to be kept as a mandatory minimum balance in the account at all times.

Also Read: India’s formal jobs grow steadily as 2.1 million join EPFO in July

In a post on X, Congress MP Manickam Tagore said the Modi government's new Employees' Provident Fund Organisation (EPFO) rules are nothing short of “cruelty”.

"Pensioners and job-losers are being punished for needing their own savings. Prime Minister Narendra Modi ji — this is the time to intervene and stop Mansukh Mandaviya from destroying people's lives.

“Under the new EPFO decisions, you can withdraw PF only after 12 months of unemployment (earlier 2 months). Pension can be withdrawn only after 36 months (earlier 2 months). Twenty-five per cent of your own EPF will be locked forever!” he claimed.

Tagore said, “Who benefits from this, Mr Modi? Certainly not the workers. Imagine a worker who loses his job or a retiree waiting for years to access his hard-earned savings — while the Govt writes off lakhs of crores for its crony friends. This is not reform, this is robbery.”

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He claimed Labour Minister Mandaviya's decisions will finish off the lives of pensioners who depend on EPF to survive.

"Prime Minister, please intervene immediately. Don't let bureaucratic cruelty destroy the dignity of India's working class," he said.

TMC MP Saket Gokhale said the new EPFO rules introduced by the Modi government are “shocking and ridiculous”.

A Press Information Bureau fact check said Gokhale's claims are "misleading" and gave a point-by-point clarification on these claims.

"Claim 1: Of your EPF balance, 25% cannot be withdrawn and will remain LOCKED IN for your entire career until you retire. Full withdrawal of the entire PF balance (including the minimum balance of 25%) is allowed under a few conditions, like retirement after attaining 55 years of service, permanent disability, retrenchment, voluntary retirement, or leaving India permanently, etc.," the fact check said.

Simplified provisions allow full withdrawal of the entire PF balance, including the minimum balance of 25 per cent, after 12 months of continuous unemployment, it said.

"Claim 2: EPF has been made mandatory, which means salaried persons cannot escape this draconian monthly robbery by the Govt of their own income. The EPF and MP Act 1952 was always mandatory for all establishments employing 20 persons or more, earning Wages less than or equal to ₹15,000 per month," it said.

(With inputs from ANI)