The Ministry of Labour and Employment, via a notification dated December 6, has amended the Employees’ Provident Fund (EPF) Scheme to allow its members to withdraw money from the corpus if he/she remains unemployed for more than one month. This rule will come into effect from the date of notification, i.e., December 6.
Though the move was announced in June this year after the meeting of the Central Board of Trustees (CBT) of EPFO, only now has the government notified it so that it becomes law.
The new rule
According to the notification, a member of EPF can now withdraw money for a maximum up to 75 per cent of the credit balance from his/her account if he/she remains unemployed for a period not less than one month.
This will be a non-refundable advance meaning that a member can take out his/her money without closing his account and will not have to refund the money withdrawn.
This will come as a relief for many as they can withdraw three-quarter of their EPF balance after a month of quitting their job and use this money to meet any financial contingencies. However, members of the retirement body will continue to have choice to apply for final withdrawal after two months from the date of cessation of unemployment.
“EPF Scheme 1952 does not have provision for advance to members during such kind of non-employment, and the scheme allows only full and final settlement. This compels members to withdraw entire amount. Such early closure of membership also goes against the objective of providing social security to the members and family,” CBT agenda note said.
