In a significant move to enhance the ease of living for over 7.5 crore members, the Employees’ Provident Fund Organisation (EPFO) has decided to increase the auto-settlement limit for advance claims from Rs 1 lakh to Rs 5 lakh. The proposal, approved by Labour and Employment Secretary Sumita Dawra, was discussed in the 113th meeting of the Executive Committee (EC) of the Central Board of Trustees (CBT) held in Srinagar on March 28.

EPFO members will be able to withdraw up to Rs 5 lakh under ASAC

Following the CBT’s final approval, EPFO members will be able to withdraw up to Rs 5 lakh under the auto settlement of advance claims (ASAC). This system, introduced in April 2020 for medical emergencies, was later expanded in May 2024, raising the withdrawal limit from Rs 50,000 to Rs 1 lakh.

The EPFO has now extended the auto settlement facility to cover additional categories, including education, marriage, and housing. Previously, auto-settlement was limited to medical emergencies and hospitalisation. The system ensures rapid processing, with claims being settled within three days.

According to official sources, EPFO processed a record 2.16 crore auto claims as of March 6, 2025, compared to 89.52 lakh claims in 2023-24. The claim rejection rate has also dropped to 30 percent from 50 percent in the previous year.

EPFO has reduced validation formalities from 27 steps to 18

To further streamline the withdrawal process, the EPFO has reduced validation formalities from 27 steps to 18, with plans to bring them down to just six. The entire auto-settlement mechanism is driven by an advanced IT system, ensuring minimal human intervention. Claims with verified Know Your Customer (KYC) details, eligibility, and bank validation are processed automatically, reducing the settlement time from 10 days to just 3-4 days.

New system for provident fund withdrawals through UPI

In a major technological advancement, the EPFO is also set to introduce a new system for provident fund withdrawals via Unified Payments Interface (UPI). Labour and Employment Secretary Sumita Dawra confirmed that the ministry has approved the National Payments Corporation of India’s (NPCI) recommendation, allowing EPFO members to withdraw their PF through UPI or ATMs by May or June this year. This development could potentially extend to other schemes, including the General Provident Fund (GPF) for government employees and the Public Provident Fund (PPF) managed by banks.