Unemployed members of retirement fund body EPFO will now be able to avail final settlement or full withdrawal of funds from provident fund as well as pension accounts after 12 months and 36 months of unemployment, respectively. The decision to amend the scheme was taken by apex decision making body of the Employees' Provident Fund Organisation (EPFO), the Central Board of Trustees headed by Labour Minister Mansukh Mandaviya, in a meeting held on Monday.
Presently, the scheme provides for withdrawal of all funds from the provident fund as well as pension account after two months of continuous unemployment. A senior official explained that the decision was taken to ensure social security benefits to the formal sector workers in the country who generally exit the ambit of the EPFO after two months of unemployment.
Key Changes in Timelines:
The reason for the increase in timeline is to allow the subscribers avail the benefit of EPFO interest for a period of at least 12 months and avail pension benefits. Full corpus can be withdrawn after 12 months only.
EPFO’s circular dated 19 September 2025 allows immediate part payment of Provident Fund settlement where issues exist—remaining balance to be paid after procedural gaps are closed. This move aims to mitigate hardship by ensuring cash flow via part payments while issues like short/non-remittance of contributions by employers are fixed.
As per the manual, partial payment can be made in these situations:
All partial payment cases should be recorded in a “part payment register.” This will be reviewed monthly, and as soon as the remaining amount becomes available, the payment will be made directly without any fresh claim.
The CBT has decided to revamp the partial withdrawal rules to enhance the Ease of Living for EPF members.
| Category | EPFO Old Rules | EPFO New Rules |
|---|---|---|
| Withdrawal Limit | Capped amounts for specific purposes | Up to 100% eligible balance; 25% must remain |
| Purpose-based | 13 complex categories | Consolidated into 3 (Essential, Housing, Special) |
| Service Period | Varied (5–7 years) | Standardised to 12 months |
| Max Withdrawals | Typically 2–3 total | Up to 10 (Education), 5 (Marriage) |
| Auto Settlement | Up to ₹1 lakh | Increased to ₹5 lakh |
The CBT decided to simplify the partial withdrawal provisions by merging 13 complex provisions into a single rule. These include Essential Needs (illness, education, marriage), Housing Needs, and Special Circumstances. Under 'Special Circumstances', members can now apply without assigning any reasons like natural calamity or lockouts.
The EPFO has increased the auto-claim settlement limit from ₹1 lakh to ₹5 lakh. Claims within this limit will now be processed automatically within 72 hours, without manual verification. Scheme provision simplification, along with greater flexibility and zero need for any documentation, will pave the way for 100% auto settlement.
EPFO 3.0 Features:
For online application, a member needs to login to the EPFO member portal and follow these steps:
Once the employer approves it, the settlement amount is transferred to the bank account directly.
Under the new rules, you can apply for final PF settlement only after 12 months of leaving employment.
Members must maintain a minimum of 25% of their accumulated contributions in the account for at least 12 months.
All claims made under auto-settlement mode will be settled digitally within 3 days or 72 hours.
EPFO will release the available PF balance immediately as part payment. The balance will be paid later without requiring a fresh application.