Many people face difficulties accessing money from their Provident Fund (PF) accounts during emergencies, even if funds are available. Currently, withdrawing money requires providing a valid reason.
However, the government has hinted at a significant change in EPFO rules. According to a report by Zee Business, the new proposal may allow PF withdrawals up to six times a year without needing to provide any reason. But there is one condition—let’s take a closer look.
Key Changes in the New Proposal
The proposed changes include:
Up to six PF withdrawals per year without giving a reason.
Maximum withdrawal limit: 50% of the PF balance per year. This ensures that employees still save enough for retirement.
These changes aim to provide immediate relief during emergencies, make cash flow management easier, and give employees greater control over their finances.
Previous Rules for PF Withdrawals
Until now, PF withdrawals were subject to strict conditions:
Marriage: Up to 50% of the PF balance, only after 7 years of membership.
Education: Up to 50% of PF balance, only after 7 years of membership.
Buying or building a house: Allowed from PF and EPS, only after 5 years of employment.
Medical emergencies: Withdrawals were allowed as per need, with no limit.
Unemployment: Up to 75% of PF balance, but only after being unemployed for at least one month.
Other Proposed Changes in the EPFO System
Apart from withdrawal rules, other improvements are being considered:
Mandatory e-nomination to make it easier for families to claim PF.
Passbook Lite facility for easier balance checking.
Fast Track Settlement to speed up claim processing.
These changes aim to make the EPFO system more user-friendly and efficient.