PF Rules Change: EPFO resolves PF withdrawal issues after job exit, learn new rules
The EPFO’s clarification has brought significant relief to employees who were planning to leave their jobs and start their own businesses. Previously, it was claimed that the full amount could only be withdrawn after 12 months of leaving the job.
PF Rules Change: A clarification issued by the Employees’ Provident Fund Organization (EPFO) on Wednesday provided significant relief to employees who were planning to leave their jobs and start their own businesses. Previously, it was claimed that the full amount could only be withdrawn after 12 months of leaving the job.
Major Changes in Rules
It is noteworthy that the EPFO recently made significant changes to the PF withdrawal rules. Specifically, in the event of a job loss or dismissal, an employee will be able to withdraw funds from their PF account after 12 months. Similarly, withdrawals from the pension account (EPS) will be possible after 36 months. Previously, this deadline for both funds was two months. This decision created confusion and confusion among employees, and the opposition also protested.
Elaborating on this rule, the EPFO stated that an employee can withdraw 75 percent of the amount immediately after leaving the job, and the entire amount after one year of unemployment. The EPFO also stated that under the new rules, the withdrawal limits for education or unemployment have been relaxed, and in certain circumstances, the entire eligible amount can be withdrawn twice a year without any questions or answers.
Important questions and answers related to this matter
1. What were the previous rules for PF withdrawals after leaving a job?
Until now, if an EPFO member remained unemployed for two months for any reason, they could withdraw the entire amount from their PF and Pension (EPS) account. However, the EPFO has now extended this period.
2. What are the new rules?
Now, 75% of the amount can be withdrawn from the PF account immediately after leaving the job. The remaining amount will be allowed after one year.
3. Why did the EPFO have to change the rules?
According to the organization, if someone withdrew the entire amount two months after leaving their job, their service period would be broken. Ten years of continuous service is mandatory for pension. Repeated withdrawals would prevent the mandatory 10 years of service, depriving the employee of pension benefits.
4. What benefits will the changed rules bring to members?
The new rules will curb the tendency to prematurely withdraw funds from PF and pension funds. By extending the withdrawal period, fewer people will close their PF accounts completely, allowing them to remain linked to a single UAN (Universal Account Number). If an unemployed member regains employment for two months, they will remain connected to EPFO schemes without interruption. This will continue to count towards their service period and they will remain eligible for pension.
5. How much can other members withdraw from their PF accounts?
25% of the member’s PF balance will be preserved as a retirement fund. Members can withdraw 100% of their eligible balance at any time, subject to 12 months of service.
6. What provisions have been made for partial withdrawals?
Employees will now be able to withdraw money from their provident fund every year for purposes such as marriage, housing, etc. Previously, this limit was 5-7 years. Under special circumstances, funds can be withdrawn easily without any documentation.
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