Alert from EPFO: Withdrawal Facility May Face Imminent Discontinuation

The Employees’ Provident Fund Organisation (EPFO) has closed the option for subscribers to withdraw a portion of their retirement savings as a Covid-19 relief measure. This information comes from a report in the Economic Times, but there's no official confirmation yet, and Mint couldn't independently verify this.

During the 2020 pandemic, when the world was grappling with the effects of COVID-19, EPFO allowed its members to take two advances from their Employees’ Provident Fund (EPF) account.

The special withdrawal provision, aimed at addressing members' financial needs during the pandemic, was initiated in March 2020 under the Pradhan Mantri Garib Kalyan Yojana (PMGKY). 

The Ministry of Labour & Employment amended the Employees’ Provident Funds Scheme in 1952 to introduce this provision by adding sub-para (3) under paragraph 68L through an official gazette notification.

According to this arrangement, a non-refundable withdrawal was allowed for an amount equivalent to three months' worth of basic wages and dearness allowances or up to 75% of the member’s credit in the EPF account, whichever was less.

The EPFO, responsible for retirement funds, requires employees and employers to contribute 12% of the basic salary and dearness allowance. This not only acts as a means of saving on taxes but also provides higher interest rates on investments.

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