The Employees’ Provident Fund Organisation (EPFO) is set to enhance the auto settlement limit for provident fund (PF) withdrawals from ₹1 lakh to ₹5 lakh, marking a significant step toward simplifying access to retirement savings. This proposal, aimed at improving the “Ease of Living” for 7.5 crore EPFO members, was recently approved by Sumita Dawra, Secretary, Ministry of Labour and Employment, during the 113th meeting of the Executive Committee (EC) of the Central Board of Trustees (CBT).
Once the CBT grants final approval, EPFO members will be able to withdraw up to ₹5 lakh through the Auto Settlement of Advanced Claim (ASAC) system without manual intervention. This move aligns with EPFO’s broader strategy to modernize its services and provide faster, hassle-free claim settlements.
Key Highlights of the Auto Settlement Limit Increase
| Aspect | Details |
|---|---|
| Previous Withdrawal Limit | ₹1 lakh |
| New Proposed Limit | ₹5 lakh |
| Approval Status | Awaiting final clearance from CBT |
| Objective | Faster access to PF funds through automation |
| Beneficiaries | 7.5 crore EPFO members |
With this enhancement, EPFO aims to eliminate processing delays, ensuring that subscribers can access their hard-earned savings when needed.
What is Auto Settlement of Advanced Claims (ASAC)?
The Auto Settlement of Advanced Claims (ASAC) was introduced in April 2020 to enable faster PF withdrawals for medical emergencies. This system uses automation and digital verification to approve claims, significantly reducing human intervention and speeding up fund disbursal.
Recent Changes in Auto Settlement Limits
| Date | Auto Settlement Limit |
|---|---|
| April 2020 | Introduced for medical emergencies |
| May 2024 | Increased from ₹50,000 to ₹1 lakh |
| March 2025 (Proposed) | To be increased to ₹5 lakh |
This fivefold increase in withdrawal limits will greatly benefit EPFO subscribers, particularly during urgent financial needs.
Expansion of Auto Settlement for More Categories
Initially, the ASAC system was available only for medical emergencies. However, to provide greater financial flexibility to subscribers, the EPFO has now expanded auto settlement to cover three additional categories:
- Education – Members can withdraw PF for their or their children’s higher education.
- Marriage – Funds can be used for wedding expenses of self, children, or siblings.
- Housing – Subscribers can withdraw PF to purchase or construct a house.
This move ensures that EPFO members can access their retirement savings in times of need without cumbersome paperwork or delays.
EPFO Exploring ATM-Based Withdrawals for Faster Access
In another significant development, EPFO is considering introducing dedicated ATM cards that will allow subscribers to withdraw their provident fund money directly after claim settlement. Currently, claimants have to wait 7-10 days for settlement before the amount is transferred to their bank accounts.
How Will the ATM-Based Withdrawal System Work?
- EPFO members will receive dedicated ATM cards linked to their PF accounts.
- Once a withdrawal claim is approved and settled, the funds will be instantly accessible via ATMs.
- This system will eliminate long waiting times associated with bank transfers.
Benefits of the Proposed ATM System
| Feature | Impact |
|---|---|
| Faster Withdrawal | No more waiting 7-10 days for bank transfers. |
| Convenience | Members can withdraw money anytime, just like a bank account. |
| Improved Accessibility | Available 24/7 at any ATM. |
| Enhanced Security | Dedicated cards reduce dependency on third-party transactions. |
EPFO is currently upgrading its hardware infrastructure to support this new withdrawal system, which is expected to be rolled out soon.
EPFO’s Employees’ Deposit Linked Insurance (EDLI) Scheme – What’s Changing?
Apart from auto settlement enhancements, the Employees’ Deposit Linked Insurance (EDLI) scheme—which provides financial assistance to the families of deceased EPFO subscribers—is also set to undergo modernization.
Under the new system, legal heirs of deceased subscribers may soon be able to withdraw insurance claims using ATMs, similar to PF withdrawals. Currently, the EDLI scheme provides a maximum insurance cover of ₹7 lakh to nominees of deceased EPFO members.
By digitizing claim settlements, EPFO aims to streamline access to insurance benefits, reducing paperwork and improving efficiency.
A Major Step Toward Digitization and Convenience
The increase in auto settlement limits and the proposed ATM-based withdrawal system mark a significant leap in EPFO’s commitment to digital transformation. These measures are set to enhance financial security, accessibility, and convenience for 7.5 crore subscribers.
Key takeaways from these developments:
✔ Auto settlement limit for PF withdrawals increased from ₹1 lakh to ₹5 lakh
✔ EPFO expanding auto settlement to education, marriage, and housing
✔ Proposal for dedicated EPFO ATM cards to speed up withdrawals
✔ EDLI claims may soon be accessible through ATMs
As EPFO continues to modernize its processes, subscribers can expect faster, smoother, and more efficient claim settlements in the near future.
Frequently Asked Questions
1. What is the new auto settlement limit for EPFO withdrawals?
The auto settlement limit for EPFO withdrawals is proposed to be increased from ₹1 lakh to ₹5 lakh, pending final approval from the Central Board of Trustees (CBT).
2. What are the benefits of increasing the auto settlement limit?
With this increase, subscribers can withdraw larger sums without manual intervention, ensuring faster access to funds for emergencies, education, marriage, and housing.
3. How will the proposed EPFO ATM withdrawal system work?
Subscribers will receive dedicated ATM cards linked to their PF accounts, allowing direct withdrawals after claim settlement, eliminating the current 7-10 day waiting period.
4. What additional categories are included in auto settlement?
Apart from medical emergencies, education, marriage, and housing are now covered under auto mode settlement for EPFO members.
5. When will these new systems be implemented?
The increase in withdrawal limits is awaiting final approval, while the EPFO ATM withdrawal system is under development, with a rollout expected after infrastructure upgrades are completed.
By embracing automation and digital banking services, EPFO is set to enhance user experience and ease financial access for millions of subscribers. Stay tuned for further updates on these exciting developments!
Click here to know more.
Kishan is a knowledgeable writer specializing in agriculture and the latest government job recruitments, delivering clear and insightful content to inform and empower readers.