Inoperative EPF Accounts Surge Over 200 Per Cent In Six Years; Funds Soar Over Five Times: How To Claim The Refund

The Employees’ Provident Fund Organisation (EPFO) has been facing several operational issues for quite some time, and due to this several grievances. Although the organisation has taken measures lately to improve its systems and make the processes smoother, convenient, and user-friendly, there is more to do. The number of inoperative employees' provident fund (EPF) has grown more than 200 per cent in the last six years to 21,55,387 inoperative EPF accounts in financial years 2023-24. The amount in these accounts has also grown more than five times to Rs 8,505 crore during this time, reported PTI, citing the written reply in parliament by the Minister of State Shobha Karandlaje.

She informed that in 2023-24, Rs 2,632.29 crore amount was settled in these accounts. According to her reply, there were around 21,55,387 inoperative EPFO accounts in 2023-24.

Year         Inoperative Account    Amount held   Amount settled 2023-24    21,55,387         Rs 8,505.23 crore        Rs 2,632.29 crore             

2022-23    17,44,518             Rs 6,804.88 crore        Rs 2,673.97 crore             

2018-19    6,91,774               Rs 1,638.37 crore        Rs 2,881.53 crore           

Also Read: EPFO Plans To Allow More Banks For EPF Collection To Speed Up The Process: Know The Impact       

The trend shows a decline in settled amount. According to the minister’s statement, when an EPF member files a refund claim, EPFO scrutinises it and, satisfied with the valid details, settles the claim.

What Is An Inoperative EPF Account?

An EPF account becomes inoperative when the member attains the age of 58. Another reason for becoming an account inoperative is when no transaction takes place in three years. It could be due to various reasons, including leaving a job without joining any other, self-employment, or start-up, among others. According to the EPFO website, “An account is classified as an Inoperative account in which contribution has not been received for 3 years after retirement or permanent migration abroad or in case of death”.

However, a member can send a request to EPFO to unblock the account and claim the amount lying in the inoperative account.

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How To Make EPF Accounts Active?

UAN is unavailable or is not Aadhaar/KYC compliant:

Generate Universal Account Number (UAN) and Update KYC: The member needs to link the UAN with the inoperative account. If the UAN does not exist, the EPF account is considered a non-KYC complaint. In that case, one should generate a UAN by physically visiting the field office and applying there to generate a UAN. For an old age or disability case, the same request can be sent online through the EPFiGMS portal and a representative from EPFO will come to do biometric verification and generate UAN.

Link UAN With Account And Update KYC: If the UAN already exists but is not linked with the account and KYC is not seeded, a request can be given for linking the EPF account with the existing UAN by visiting the field office or requesting online for the eligible cases (Old age and disability). Once the account is linked, the member needs to ask the previous employer to link their KYC. Field officers can also directly do the KYC. After KYC seeding, the member can send a request to unblock the account. Once done, the amount can be claimed. 

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EPF Account Are Linked To UAN And KYC Seeded:

Inoperative For Less Than Three Years: If an account has been inoperative for less than three years but the member has a UAN linked with the EPF account, a request for unblocking the account can be sent online. When it is approved, the refund claim can be raised.

Inoperative For More Than Three Years: If the UAN-linked EPF account remains inoperative for more than three years, an unblocking request can be sent offline by visiting the field office as well as online. Once approved, the member can send the refund claim request.

For the dead members' unsettled accounts, their nominees need to file a refund claim. In such cases, EPFO needs to generate UAN, seed KYC, and take the biometric details of the nominee/s, before settling any refund claim.