The Labour Ministry issued a notification on March 29 amending the Employees’ Provident Fund scheme, 1952 to allow EPF subscribers to withdraw non-refundable advance from their retirement savings should they need it, given the COVID-19 pandemic in the country. The notification has been issued under GSR 225(E) and adds the pandemic as a reason to a select list under which PF subscribers can withdraw non-refundable funds. EPFO has an active subscriber’s base of 60 million.
The Centre now permits withdrawal of up to 75 per cent of savings or up to three months of basic wages and dearness allowance in the event of an outbreak, whichever is lower. An employee will be able to avail this measure with immediate effect, and once withdrawn, the amount cannot be replenished after the situation improves.
A sub para (3) under paragraph 68L has been inserted in the EPF scheme of 1952, and the amended scheme came into force on March 28, 2020. Employees working in establishments and factories across India are eligible to avail the benefit of on-time non-refundable withdrawal.
Before the amendment, the average time needed to process requests for other EPF withdrawals was rather time consuming and would take up to weeks. However, following the notification, EPFO has issued directions to its field offices to process all applications received in this manner within three days, so that relief reaches the workers and their families in time.
Those subscribers who have seeded their universal account number with their Aadhar and bank accounts and are KYC compliant, can also avail this benefit online. This, however, presents an issue for the employees of small businesses and daily wage workers who need to physically approach the offices, as all offices are closed.