Last week, the Ministry of Labour and Employment issued an official notification amending the Employees' Provident Fund (EPF) Scheme. The retirement fund body has now given its over 5 crore subscribers an option to withdraw up to 75 per cent of their total PF balance after one month of unemployment. The new rule came into effect from December 6.
The decision had been taken in June this year at the EPFO's Central Board of Trustees (CBT) meeting. Previously, a subscriber could only withdraw his or her funds after two months of unemployment.
Moreover, as the CBT agenda note for the meeting had pointed out, the "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."According to the new rule, a member of EPF can now withdraw up to three-quarters of his/her account. This will be a non-refundable advance, which means that a member can withdraw money without closing his account and will not have to refund the money withdrawn. Members would also have an option to withdraw the remaining 25 per cent of their funds and opt for a final settlement of their accounts after completion of two months of unemployment under the new provision. Alternatively, they can choose to retain their account with the EPFO, which can be used after finding another job.