Winning Bizness Desk
Mumbai.In a significant step to improve ease of access for its 7.5 crore members, the Employees’ Provident Fund Organisation (EPFO) has decided to increase the auto-settlement limit for advance claims from ₹1 lakh to ₹5 lakh. The proposal was approved by Labour and Employment Secretary Sumita Dawra during the 113th Executive Committee (EC) meeting of the Central Board of Trustees (CBT) in Srinagar on March 28. The decision is now pending final approval from the CBT. Once implemented, EPFO members will be able to withdraw up to ₹5 lakh through the Auto Settlement of Advance Claims (ASAC) system, which was originally introduced in April 2020 for illness-related withdrawals.
Faster Claim Processing and Expanded Categories
EPFO’s automated claim settlement system, which initially had a withdrawal limit of ₹50,000, was raised to ₹1 lakh in May 2024. The scope of the ASAC system has also been expanded to cover various financial needs, including education, marriage, and housing, in addition to medical emergencies. With 95% of claims now being processed automatically, the settlement period has been significantly reduced from 10 days to just three. In the ongoing financial year, EPFO has successfully processed a record 2.16 crore auto-claims, a sharp increase from 89.52 lakh in 2023-24.
Lower Claim Rejection Rates and Simplified Verification
The automation of the claim process has also led to a decline in claim rejection rates, which have dropped from 50% to 30%. This has been made possible by an IT-driven solution that minimizes human intervention and streamlines verification procedures. The number of steps required for claim validation has been reduced from 27 to 18, with further plans to bring it down to just six. To enhance efficiency, EPFO has implemented centralized IT-enabled databases that validate KYC details, eligibility, and bank authentication, ensuring smooth and seamless claim settlements for members.
PF Withdrawals via UPI and ATMs by Mid-2025
In a major step toward digital financial inclusion, EPFO is set to introduce Provident Fund (PF) withdrawals through Unified Payments Interface (UPI) and ATMs by May or June 2025. This initiative has been approved by the Labour Ministry following a proposal by the National Payments Corporation of India (NPCI). The new system aims to provide easier access to PF funds, reducing delays and making withdrawals more convenient for members.
Expansion to Other Provident Fund Schemes
This initiative may also be extended to other provident fund schemes, such as the General Provident Fund (GPF) for government employees and the Public Provident Fund (PPF) offered by banks. The move is expected to enhance financial flexibility for millions of salaried employees, making PF withdrawals more accessible and efficient. By incorporating digital payment systems and further automating the settlement process, EPFO aims to modernize its services and improve financial convenience for its members.
