EPFO Hikes Auto-Settlement Limit for Advance Claims To Rs 5 Lakhs: Here’s How It Helps You

The Employees’ Provident Fund Organisation (EPFO) recently announced a major change that could be a big relief for salaried workers. The retirement fund body has now raised the upper limit for auto-settlement of advance claims from Rs 1 lakh to Rs 5 lakh.

If you are a Provident Fund (PF) account holder who’s ever had to withdraw money for an emergency, be it medical treatment, education , or even home repair, you probably know the process has not always been smooth.

This increase in auto-settlement limit means that a lot more people will now get their advance claims settled faster, with minimal intervention.

But, first, you should know what exactly is the 'Auto-settlement' service of EPFO?

To put it simply, auto-settlement is EPFO's system-driven process that approves and disburses eligible advance claims without the need for anyone to manually check and approve your file. The system does the job needed that everything on your end is in order. The service cuts down on processing time and removes avoidable delays.

This feature was rolled out by EPFO during the Covid-19 period when people needed quick access to money. Since then, the EPFO has expanded it to cover advance withdrawals for illness, education, marriage, and housing. The idea is to make it easier for members to access their own savings, without unnecessary friction.

With the revised limit, claims of up to Rs 5 lakh that meet the criteria can now be processed within three working days. For context, under the earlier Rs 1 lakh limit, a large number of cases had to be routed manually or took longer to clear.

A Look at the Numbers

EPFO's shift toward automation seems to be working. In the financial year (FY) 2024-25, the retirement fund body processed over 2.34 crore claims through auto-settlement, a jump of more than 160 per cent compared to the previous year. And in just the first couple of months of FY 2025-26, it has already auto-settled over 76 lakh claims. That's about 70 per cent of all advance claims received so far this year.

But there's a catch: You have to be 'eligible'

The service of auto settlement is not just about how much you claim, it also requires you to keep personal details up to date in the EPFO system. Here's a list of things that you should ensure are in place:

• UAN (Universal Account Number) needs to be activated and your mobile number used for activation must be linked and active.

• Your Aadhaar should be seeded with your EPFO account, and you will need to verify your identity using OTP when you apply for a claim.

• Your bank account details, including the IFSC code, should be linked to your EPF account.

• Your PAN if you are withdrawing your full PF amount before five years of service, should also be linked.

If even one of these details is missing or outdated, your claim could fall outside the auto-settlement process and take longer to clear.