In a significant move to enhance provident fund accessibility, the Employees Provident Fund Organisation (EPFO) has proposed raising the auto-settlement limit for advance claims from ₹1 lakh to ₹5 lakh. This fivefold increase aims to simplify the withdrawal process for EPFO’s 7.5 crore members, reinforcing the government’s vision of “Ease of Living.”
Faster, AI-Driven Auto-Settlement
The auto-settlement feature was first introduced in April 2020 for medical emergencies. Over time, its scope expanded to include education, marriage, and housing withdrawals. EPFO had previously increased the limit from ₹50,000 to ₹1 lakh in May 2024. Now, with the proposed limit of ₹5 lakh, claim processing will be significantly faster, with 95 percent of settlements expected to be completed within three days using EPFO’s AI-driven system.
Record Auto-Claim Settlements
EPFO has seen a surge in auto-claim settlements, processing a record 2.16 crore claims this financial year as of March 6, 2025, compared to 89.52 lakh in 2023–24. Rejection rates have also declined sharply from 50 percent to 30 percent, indicating improved efficiency in the claim settlement process.
Reduced Paperwork and Faster Approvals
To further streamline withdrawals, EPFO has reduced the number of validation formalities from 27 to 18, with plans to bring it down to just six. This reduction aims to make the process more user-friendly and efficient.
UPI Integration for Instant PF Withdrawals
EPFO is also set to integrate the Unified Payments Interface (UPI) into its withdrawal system, allowing members to receive their PF funds directly through digital payment apps like Paytm, Google Pay, and PhonePe. According to Sumita Dawra, Secretary, Ministry of Labour and Employment, the National Payments Corporation of India (NPCI) has already secured approval for this initiative, with a rollout expected by May or June 2025.
With UPI integration, settlement time could be reduced from the current 2–3 days to just minutes, ensuring quicker access to funds while reducing rejection rates and enhancing transparency. The initiative may also extend to other schemes such as the General Provident Fund (GPF) and Public Provident Fund (PPF), further benefiting millions of users.
This transformation marks a significant milestone in EPFO’s ongoing efforts to modernize and simplify financial processes, ensuring greater convenience for its members.
