EPFO claim: EPFO simplifies auto-settlement for medical, education, housing claims. Check steps for fund withdrawal

The Employees’ Provident Fund Organisation (EPFO) has introduced auto-mode settlement of advance claims for medical, education, marriage and housing purposes. Auto mode of claim settlement was introduced in April 2020 for the purpose of advance for illness. The facility was extended to education and marriage under Rule 68K and for housing under Rule 68B, via a press release dated May 13, 2024.

The claim limit was enhanced to Rs 1,00,000 from Rs 50,000 earlier. “During the current year, around 2.25 crore members (22.5 million) are expected to reap the benefits of this facility,” said the release. In the auto claim Solution, in-claim is processed automatically by IT system without any human intervention.

How will the auto-settlement system work

It is a known fact that EPFO usually takes some time to process a claim. This is primarily due to the EPFO checking the eligibility of the EPF member, documents submitted (if any) for claim processing, KYC status of EPF account, valid bank account details, etc. 

So, how's the auto-settlement system different? 

As per the Ministry of Labor and Employment release, the entire process in auto-settlement is IT system driven, eliminating human intervention. Any claim with KYC, eligibility and bank validation is processed for payment by IT tools automatically. 

As the periodicity of claim settlement is reduced significantly from 10 days to 3-4 days for such advances. The claim that are not validated by system are not returned or rejected. They are further, undertaken for second level of scrutiny and approvals.

How to claim the advances

The claims have to availed under different sections. An EPF member should know the rules to apply for EPF withdrawal for medical illnesses under Rule 68J, marriage or higher education under Rule 68K and housing advance under Rule 68B. The eligibility criteria for an advance vary in each case.

Rule 68J

For the medical claim, a member is required to submit a certificate signed by an employer or doctor. For the medical claim, an EPF member can apply for a withdrawal at any time irrespective of the number of years completed with the EPF scheme. 

Rule 68K

To claim funds for marriage or higher education purpose, the EPF member should complete 7 years with the EPFO. As per the rules, such an advance can be withdrawn three times in the entire tenure with EPFO. 

An EPF member can withdraw a maximum of 50% of his share with interest. To withdraw money for marriage, the EPF member is required to submit a declaration in the online format. 

For children's higher education, a certificate regarding the course of study and the estimated expenditure from the head of the educational institution concerned is required to be submitted.

Rule 68B

To take an advance from EPF account to buy or construct a flat/house, the EPF member has to complete five years with EPFO. EPFO also allows advance withdrawal for repairs and renovation of the house; this can be done twice. The amount that can be withdrawn depend on the purpose.

For withdrawal of funds, 24 months' basic salary and dearness allowance for purchase of site or 36 months' basic salary and dearness allowance for purchase of house/flat/construction is required. For withdrawal of an advance from EPF account for repair and alteration of the house, the amount allowed is the least of 12 months' basic salary and dearness allowance.