Govt puts new PF withdrawal norms on hold till July 31 after violent protests

"The notification (tightening PF withdrawal norms) will be kept in abeyance for three months till July 31, 2016. We will discuss this issue with the stakeholders," Labour Minister Bandaru Dattatreya told reporters.

His announcement comes in the midst of protest by labour unions in several parts of the country against the bar on withdrawing employer's contribution from the PF money.

People have also launched an online campaign against the decision, which was to be implemented from February 10 but was later put on hold till April 30.

The police on Monday lathicharged a crowd of garment factory workers protesting against the amendment to the EPF Act.

Dattatreya said a meeting of the Central Board of Trustee would be called "to see how best the employers' contribution to EPF (3.67% of basic wages) can be utilised for workers."

The Labour Ministry is also contemplating permitting withdrawal of all accumulations by Employees' Provident Fund Organisation's (EPFO) subscribers on grounds like purchase of house, serious illness, marriage and professional education of children. The matter has been referred to Law Ministry for clearance.

In February, the ministry had issued a notification restricting 100% withdrawal of provident fund by members after unemployment of more than two months, among others.

Following the concerns raised by trade unions and other stakeholders, the ministry decided to keep the notification in abeyance till April 30. Its implementation has been again deferred till July 31, as per a Labour Ministry statement.

Now, the EPFO subscribers who are out of job for more than two months can file for full and final settlement of provident fund till July end.

"On the direction of Labour Minister, the said provision will now come into effect from August 1, 2016 by issue of an amended notification," the statement said. 

The proposal to amend the scheme to allow all accumulations on different grounds like purchase of house, serious illness, marriage and professional education of children, has been sent for vetting by the Law Ministry.

The proposal also allows withdrawal of all accumulation by EPFO members who have joined an establishment or firm of central or state government and became the member of contributory provident fund or old age pension under any scheme frame by them.

The unions have been demanding complete rollback of the decision tightening the PF withdrawal norms.

Earlier in February, the EPFO had amended the EPF Scheme 1952 to tighten the various norms for withdrawal of provident fund including increasing age limit for filing such claims by retiring employees to 58 years from 54 years.

Besides, the EPFO had also restricted withdrawal of PF to own contribution of subscribers and interest earned on that, if the claimant has remained unemployed for more than two months. The member would be able to withdraw employer's contribution on maturity.

It was stipulated that the requirement of two months' unemployment will not apply in cases of women members resigning from the services for the purpose of getting married, on account of pregnancy or child birth.

According to the new norms, subscribers will not be able to claim withdrawal of PF after attaining 54 years of age. They would have to wait till attaining the age 57 years.

As per the earlier norms, subscribers were allowed to claim 90% of their accumulations in their PF account at the age of 54 years and their claims were settled just one year before their retirement.

As per experts, the earlier clause was relevant because there were establishments where retirement age was 55 years or 56 years. But this will create a problem in private as well as public sector where people opt for voluntary retirement.

In another change, EPFO had made it mandatory to wait till attaining the age of 57 for claiming PF withdrawal for transferring that to the Life Insurance Corporation of India for investment in Varishtha Pension Bima Yojana.

Earlier norms used to allow subscribers to claim 90% of their accumulations for investing in the scheme after attaining the age of 55 years.