The Employees’ Provident Fund Organisation (EPFO) has announced significant changes to the existing withdrawal rules, allowing employees to withdraw money from their Provident Fund (PF) accounts.
The EPFO has announced this reform to make the whole system simpler, faster, and more transparent, so that employees can access their savings easily without losing long-term financial protection.
100% Partial Withdrawal
The EPFO members can now withdraw up to 100% of their eligible PF balance. It includes both their own contribution and the employer’s share.
Earlier, the employer’s share could only be withdrawn in special situations like retirement or unemployment. This change in rules now allows the employees to use their full eligible balance whenever required, without any unnecessary restrictions.
Simplified Withdrawal
Ensuring faster claim approvals, EPFO has merged 13 different partial withdrawal rules into just three simple categories–Essential Needs: for medical treatment, education, or marriage, Housing Needs: for buying or constructing a house and Special Circumstances: for emergencies — no reason or documents required.
Liberalised Withdrawals
For marriage and education, the EPFO has made the withdrawal process more flexible. Now, members can withdraw for education up to 10 times, and for marriage up to 5 times. Earlier, the combined limit was just three times.
Minimum Service Period Reduced to 12 Months
Different withdrawal purposes required different years of service earlier. But the EPFO has reduced the minimum service period to just 12 months for all.
‘Special Circumstances’ needs no Documentation
Members had to justify their withdrawal with documents in case of emergencies like epidemics, natural disasters, or unemployment.
But as per the changes, the new ‘Special Circumstances’ provision now allows the members to withdraw funds without providing any reason or paperwork. This makes disbursal fast and easy. This also reduces the chances of claim rejections.
25% Minimum Balance Must Be Retained
However, the EPFO has also introduced a minimum balance rule. Members must keep at least 25% of their total PF contribution in the account, which eventually ensures 8.25% annual interest and benefits from long-term compounding and helps in building a healthy retirement fund.
Auto-Settlement and Paperless Process
The EPFO has also introduced 100% auto-settlement for partial withdrawals. This means claims can be processed without any physical documentation. This makes it completely digital and hassle-free.
Revised Timelines for Final Settlement
EPFO has increased timelines for full settlements to offer more flexibility. In case of Premature final settlement, it is extended from 2 months to 12 months, and in case of Final pension withdrawal, it is extended from 2 months to 36 months.
Full Withdrawal Still Allowed in Key Cases
For unemployment cases, 75% of the PF balance (that includes employer and employee contributions and interest earned) can be withdrawn immediately.
The remaining 25% can also be withdrawn after one year. Full withdrawal of the entire PF balance (including the minimum balance of 25%) is also allowed in case of retirement after attaining 55 years of service, permanent disability, incapacity to work, retrenchment, voluntary retirement or leaving India permanently, etc.
Pension Benefits Unchanged
The Pension entitlement at the age of 58 years is completely unaffected by these reforms. A member can withdraw the accumulation in the pension account before completing 10 years of service at any point in time during these 10 years. However, to qualify for a pension at retirement, a member must complete at least 10 years of EPS membership.
About 75% of Pension Members withdraw their entire pension amount within four years of service, i.e. in less than 10 years, ending their membership and making the member ineligible for future pension and social security benefits.
Additionally, if the pension fund is not withdrawn, the member’s family remains eligible for pension benefits for up to three years even after contributions stop—in case of the member’s death. Once withdrawn, this benefit is lost.
To encourage members to meet the 10-year eligibility for getting a pension and to allow his/her family to be eligible for benefits in case of his/her death, the proposed provision allows the member to withdraw pension accumulation after 36 months instead of 2 months. This will ensure long-term social security in the form of a pension for the member and his family.
EPFO’s Clarification
EPFO also clarifies that these reforms are not linked to rising unemployment. In fact, over 1.29 crore workers joined the payroll in 2024–25, while the unemployment rate dropped to 3.2% in 2023–24 from 6% in 2017–18.
Disclaimer:
This article is for informational purposes only. For official and updated details, always refer to circulars released by the Ministry of Labour & Employment and EPFO. Avoid acting on unverified social media claims.
Also read:
Muhurat Trading 2025: Check Timings & Key Details
Kangkan Kishor Sharma, an M.A. in Media and Journalism, serves as the Chief Contributor at NestOfNews.com. He contributes regularly, bringing insight, passion, and a deep commitment to delivering stories that truly matter. His work reflects a thoughtful understanding of media, storytelling, and the issues shaping today’s world.