New Delhi: In a major relief to Employees’ Provident Fund (EPF) subscribers, the Employees’ Provident Fund Organisation (EPFO) has increased the auto settlement limit from ₹1 lakh to ₹5 lakh. The announcement was made by Union Labour Minister Mansukh Mandaviya, highlighting that this move will significantly expedite the processing of advance claims without human intervention.
What is Auto Settlement in EPF?
Auto settlement is a technology-driven feature introduced by EPFO to streamline claim processing. It allows certain EPF advance claims to be settled automatically through an IT system without the need for human verification. This feature was initially introduced during the COVID-19 pandemic to enable faster financial support to EPF members.
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Faster Processing: Claims Settled Within 3-4 Days
Under the new ₹5 lakh limit, claims can now be settled in just 3-4 days, down from the earlier 10-day processing time. This is possible as the IT system handles all eligible claims automatically, provided the subscriber’s KYC, bank validation, and eligibility conditions are complete. This upgrade aims to provide faster financial assistance in emergencies.
Purpose-Based Withdrawals Allowed Under Auto Settlement
1. Medical Emergencies (Rule 68J)
EPF members can withdraw funds for personal or family medical expenses. No minimum service duration is required. The maximum limit is six months of basic pay + DA or the employee’s share (including interest), whichever is lower. A doctor’s certificate must be submitted as proof.
2. Marriage and Education (Rule 68K)
Employees can withdraw up to 50% of their EPF balance for self or family members’ marriage or for children’s education. To avail this, the member must have completed at least 7 years of EPF service. Withdrawals under this category are allowed only three times in a lifetime.
3. Home Construction or Purchase (Rule 68B)
EPF subscribers can withdraw funds for purchasing land, constructing a house, or home repairs. Minimum service of 5 years is required, and withdrawal is allowed only twice for this purpose. The eligible amount depends on the EPF balance and purpose.
How to Apply for EPF Auto Settlement?
Eligible members must log in to the EPFO Unified Member Portal and submit Form 31 online. Necessary documents such as declarations or certificates (depending on the withdrawal reason) must also be uploaded.
