Centre To Raise EPF Auto Settlement Withdrawal Limit To Rs 5 Lakh

The Centre is set to increase the auto settlement limit for Employees’ Provident Fund (EPF) withdrawals from Rs 1 lakh to Rs 5 lakh, in an attempt to improve the ‘Ease of Living’ for its 75 million Employees’ Provident Fund Organisation (EPFO) subscribers.

According to a report by ANI, this proposal was approved by Sumita Dawra, Secretary, Ministry of Labour and Employment, during the 113th Executive Committee (EC) meeting of the Central Board of Trustees (CBT) held in Srinagar on March 28, 2025.

The proposal will be sent to the CBT for final approval, and once authorised, EPFO members will be able to withdraw up to Rs 5 lakh through the auto-settlement of advanced claims (ASAC) mechanism. When the auto settlement system was originally implemented in April 2020 for advances linked to illness, it was later extended to cover claims for housing, wedding and education expenses also. Earlier in May 2024, EPFO had raised the claim limit from Rs 50,000 to Rs 1 lakh.

With this latest change, more members will have access to quicker and easier claim settlements.

At present, 95 per cent of claims are processed automatically within three days. Sources told ANI that EPFO achieved a historic high of 21.6 million auto claims settlements as on March 6, 2025, up from 8.95 million in 2023-24. The rejection rate for claims has also dropped significantly, from 50 per cent last year to 30 per cent this year.

To simplify the claims process, the EPFO has introduced upfront validations to ensure members are eligible to file claims. The entire settlement process has been automated, reducing manual involvement, thanks to IT systems that validate know your customer (KYC) details, eligibility, and bank details. As a result, the claim settlement term for qualified advances has been shortened from 10 days to just 3-4 days.

Subscribers will also be able to use the Unified Payments Interface (UPI) for making EPF withdrawals, which is being cited as a major breakthrough. This new system is expected to be implemented by the end of May-June 2025, offering a more convenient option for members to access their funds.

It is expected that the rise in the auto settlement limit and the implementation of PF withdrawals using UPI will significantly simplify EPFO procedures. As automation increases, members should expect faster and more efficient claim settlements.