EPFO to Raise Auto Claim Limit to ₹5 Lakh, Speeding Up PF Access for 7.5 Crore Members

The Employees’ Provident Fund Organisation (EPFO) is set to increase the auto-claim limit for provident fund withdrawals from ₹1 lakh to ₹5 lakh, significantly enhancing access to funds for its 7.5 crore members. This move aims to make Provident Fund (PF) access faster and more efficient, aligning with the government's "Ease of Living" initiative.

The decision was approved by Sumita Dawra, Secretary of the Ministry of Labour and Employment, during the 113th Executive Committee meeting of the Central Board of Trustees in Srinagar. The new limit will allow EPFO members to withdraw up to ₹5 lakh through the Automated Settlement of Advance Claims (ASAC) system, an AI-driven solution that automates claims processing.

Initially launched in April 2020, the auto-settlement system was introduced for medical emergencies and later expanded to cover educational, marriage, and housing-related claims. In May 2024, the claim limit was raised from ₹50,000 to ₹1 lakh. With this new proposal, members can expect withdrawals of up to ₹5 lakh to be processed in just three days, with 95% of claims handled without human intervention.

Record Auto-Claim Settlements and Reduction in Rejection Rates

This year, the EPFO has processed a record 2.16 crore auto-claim settlements, up significantly from 89.52 lakh settlements in 2023–24. The rejection rate for claims has also dropped sharply from 50% to 30%, marking a significant improvement in the system's efficiency.

In an effort to further streamline the process, the EPFO has reduced the number of validation formalities required for PF withdrawals from 27 to 18, with plans to cut it further to just six.

Integration of UPI to Speed Up Claim Settlements

In another significant move, the EPFO will soon integrate Unified Payments Interface (UPI) into its withdrawal system. This integration will allow members to receive their PF funds directly through popular payment apps like Paytm, Google Pay, and PhonePe. The Ministry of Labour has cleared the NPCI's proposal, and the rollout is expected by May or June 2025.

This change is expected to reduce the claim settlement time from 2-3 days to minutes, while also improving transparency and reducing rejection rates.

The UPI integration could eventually be extended to other schemes like the General Provident Fund (GPF) and Public Provident Fund (PPF), making access to government-backed savings and pension schemes faster and more convenient.