New Year Cheer for PF Subscribers

The Labour and Employment Ministry has set up a five-person committee to strategize on expediting auto claim settlements at EPFO, aiming to eliminate manual processing. This move will impact over 75 million EPFO members.

Current EPFO Claim Settlement Capabilities

EPFO currently allows automatic settlement of partial withdrawals up to Rs 1 lakh for purposes like housing, education, and marriage, an increase from the previous Rs 50,000 limit for medical expenses. Additionally, automatic settlement is available for all pension claims under the Employees' Pension Scheme (EPF) or provident fund through EPFO, subject to application validation.

Future Plans for EPFO

"The idea is to make the automatic claim settlement process more technically savvy and seamless while substantially reducing rejections," a senior government official told ET. The committee, led by G Madhumita Das, the ministry's financial advisor, is scheduled to present its findings by mid-next month, according to the official.

Challenges and Solutions

Internal evaluations indicate that only 40% of claims achieve automatic settlement, with over 60% facing rejection due to validation issues. Consequently, these rejected applications require manual processing, which significantly extends the settlement timeline. "The plan is to simultaneously do away with unnecessary validations to bring down the rate of rejection," the official said.

EPFO's Performance in 2023-24

In 2023-24, EPFO processed 44.5 million claims. The settlement timeline showed 13.9 million claims completed within three days, 14.3 million within 10 days, 14.5 million within 20 days, and 1.8 million requiring over 20 days. The settled claims comprised 40.9 million provident fund (PF) claims, including final settlements, advances and partial withdrawals, 3.45 million pension-related claims and benefits, and 75,000 insurance claims under the Employees' Deposit Linked Insurance Scheme (EDLI).