EPFO alert: Government introduces money withdrawal options for emergency purposes

You can now withdraw a significant amount from your Employee Provident Fund (EPF) at any point and do not have to wait until retirement or tendering your resignation. Witnessing the tough times during COVID-19, the EPFO has now allowed the members to withdraw a part of the amount in case of these crises. 

The EPF is also referred to as Provident Fund (PF), which is a government-backed scheme where the deduction is compulsory for salaried individuals. The employer and the employee contribute 10 per cent of the employee's basic salary each month to the Employee Provident Fund Organisation (EPFO). 

COVID-19 Advance Facility after leaving the service 

In March 2020, the government announced that a person can withdraw a part of the amount from its EPF account. Due to this, they will not have to borrow it from anywhere else and can use it at the time of need. A person can obtain an advance from its EPF balance up to three months of basic salary plus dearness allowance, or 75 per cent of the balance standing in its account, whichever is less. This advance is non-refundable and the person will not have to deposit the withdrawn money back into its EPF account. 

Avail Non-Refundable Advance in case of Unemployment 

Those who have been unemployed for a month or more can avail a non-refundable advance as well. The person can get up to 75 per cent of the amount available in their PF account. 

EPF-EDLI scheme 

If the account holder of the EPF account dies due to any reason, including COVID-19, then their family will get a maximum amount of Rs 7 lakh as part of the Employee’s Deposit Linked Insurance (EDLI) Scheme. The minimum amount threshold has been kept at Rs 2.5 lakh.