EPF withdrawal before retirement capped at 75%

The provision is aimed at providing social security to people during their period of joblessness, while ensuring them security post retirement.


A subscriber of the Employees’ Provident Fund (EPF) who has yet to reach the age of retirement and is rendered jobless for at least a month, can now withdraw only up to 75 per cent of the accumulated deposits. The cap was 100 per cent in the past and also, earlier, a jobless subscriber could only withdraw funds if he remained jobless continuously for two months.

Employees’ Provident Fund Organisation (EPFO) handles the social-security funds of workers in the organised and semi-organised sectors. The retirement fund has over six crore active members who have contributed a minimum of a month during the year.

An employee, earning up to Rs 15,000 a month, contributes 12 per cent of the basic pay to EPF, while the employer contributes 8.33 per cent towards employees’ pension scheme and 3.67 per cent to the EPF. Additionally, the employer also pay 0.5 per cent towards Employees’ Deposit-linked Insurance (EDLI) Scheme, 0.50 per cent as EPF ACs, making the total contribution equal to 13 per cent.

According to the Labour Ministry, the cap on withdrawal was decided following frequent cases of final withdrawal claims being filed by subscribers before they attain the age of 60. Since the EPF scheme does not provide advance to members during non-employment period and only allows full and final settlement, members are often forced to withdraw entire amount. Such withdrawals adversely impact the social security of the members.

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