March 31, 2025: In a significant move aimed at improving the ease of living for its 7.5 crore members, the Employees Provident Fund Organisation (EPFO) has raised the auto settlement of advanced claim (ASAC) limit from Rs 1 lakh to Rs 5 lakh. This decision, approved by Sumita Dawra, Secretary of the Ministry of Labour and Employment, was confirmed during the 113th Executive Committee (EC) meeting of the Central Board of Trustees (CBT).
The new rule will streamline access to Provident Fund (PF) withdrawals for members, ensuring faster processing and higher limits for medical, education, marriage, and housing purposes. This step is designed to provide members with greater financial flexibility and ease of access when they need it most.
EPFO Increases Auto Settlement Limit to Rs 5 Lakh for PF Withdrawals
This enhancement means that EPFO members can now withdraw up to Rs 5 lakh under the auto-settlement process, which was initially introduced in April 2020 to allow for seamless PF advances related to illness. The facility was expanded in May 2024, allowing withdrawals for up to Rs 1 lakh, and now, the limit has increased fivefold, ensuring that members can access larger amounts more quickly.
The auto-settlement process has proven to be a time-saver for millions. Previously, members were only able to withdraw PF for hospitalization purposes. However, the scope has now widened to include claims for education, marriage, and housing, making this system even more versatile.
Speed and Simplicity
The auto-claim settlement is a technology-driven process that automates claim approvals without human intervention, reducing claim processing time drastically. Claims, which used to take up to 10 days for settlement, are now processed in just 3 to 4 days. In fact, a historic high of 2.16 crore auto-claims were settled by March 6, 2025, reflecting a surge from 89.52 lakh in the previous financial year.
Additionally, the claim rejection ratio has also improved, dropping from 50% last year to just 30%, thanks to more refined validation mechanisms that ensure only eligible claims are processed. These improvements are expected to offer members faster, more reliable access to their funds.
A Future of UPI and ATM Withdrawals for PF Members
Looking forward, the EPFO is set to further modernize the withdrawal process. According to Dawra, the ministry has approved a proposal to allow members to withdraw their PF via Unified Payments Interface (UPI) and ATM by May or June 2025. This new feature is set to make PF withdrawals as easy as a bank transfer, bringing added convenience to members.
This innovation could also serve as a pilot for other public savings schemes, such as the General Provident Fund (GPF) for government employees and the Public Provident Fund (PPF) for bank customers, potentially revolutionizing the way citizens access their hard-earned savings.
The EPFO’s recent initiatives are reshaping how members interact with their provident funds, streamlining processes, and providing them with faster, more efficient services. With the auto-settlement limit raised and the potential introduction of UPI/ATM withdrawals, the EPFO is certainly setting new standards for financial ease and accessibility.
