Save For The Future: EPF Pre-Retirement Withdrawal Capped At 75 Per Cent For Unemployed Subscribers

The pre-retirement limit to withdraw money from the Employees’ Provident Fund (EPF) by unemployed subscribers has been reduced to 75 per cent from the earlier cap of 100 per cent as per the Employees’ Provident Funds (Amendment) Scheme, 2018, reports Financial Express.

However, unemployed individuals will now be eligible for withdrawal after just one month without a job, as against the earlier requirement of 2 continuous months of unemployment.

A pre-retirement withdrawal refers to a withdrawal from the EPF by an individual who has not reached the retirement age of 60.

“The commissioner or, where so authorised by the commissioner, any other officer subordinate to him, may permit a member, on ceasing to be an employee in any factory to establishment to which the Act applies, a non-refundable advance upto 75 per cent of amount standing to his credit in the fund, if he has not been employed in any factory or other establishment for a continuous period of not less than one month,” says the notification published on 6 December 2018.

The EPF is managed by the Employees’ Provident Fund Organisation (EPFO) for those employed in the organised and semi-organised sectors. The fund currently has more than six crore active subscribers.

The Labour Ministry decided on the move after finding that a large number of subscribers were ending their membership to the EPF with final withdrawal claims prior to retirement, often times due to being unemployed for a period greater than two months. Early termination of EPF membership could jeopardise the social security of the subscriber and his or her family.