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EPFO To Allow Claimants To Withdraw PF Directly from ATMs from 2025!
Moneylife Digital Team 13 December 2024
Personal Finance
The Union ministry of labour (MoL) is enhancing its information technology (IT) infrastructure to improve service delivery. The ministry is also streamlining provident fund (PF) claim settlement and, from next year, the PF-holder or claimant will be able to access or withdraw claims from automatic teller machines (ATMs), says Sumitra Dawra, secretary of MoL. The EPFO, known as the world's largest social security organisation with over 76mn (million) active contributors and over 54.65mn claim settlements in FY22-23, continues to face the ire of PF contributors and pensioners over the tedious claim process. 
 
Speaking with a news agency ANI, Ms Dawra says, "We are upgrading the IT system of our PF division. We have already seen some improvements. The speed and auto-settlement of claims have increased, and unnecessary processes have been removed. Our ambition is to bring the IT infrastructure of our EPFO to the same level as our banking system. You will see major improvements in January 2025 when we will have an IT 2.1 version in EPFO…. Claimants, beneficiaries, or insured people will be able to withdraw claims directly through ATMs, with minimal human intervention."
 
 
Dhirendra Kumar, founder and chief executive officer (CEO) of Value Research, says, "Under this innovative initiative, dubbed EPFO 3.0, members will receive special cards (don't call them debit cards, it is more profound than that) to access funds at ATMs. Imagine, you could be standing at an ATM, withdrawing your own savings, and pretending it is a major milestone in human progress. How thoughtful of them!"
 
"But wait, there is more! In a dazzling display of generosity, the EPFO is also lifting the 12% cap on employee contributions. So now, you can voluntarily contribute even more of your salary to an account that takes months of form-filling, bureaucratic acrobatics, and divine intervention to access. What a time to be alive!" he says in a message posted on X.
 
 
Recent reports reveal that EPFO has rejected every third claim it received, causing concerns among subscribers regarding the delay in claim settlement. Grievances regarding this issue have been raised by several subscribers through the official EPFO handle on social media platforms.
 
Out of the total 7.38mn claims received for final PF settlement in FY22-23, a staggering 33.8% or 2.49mn were rejected, according to official data. This rejection rate represents a significant increase compared to those in previous years, with rejection rates standing at nearly 13% and 18.2% in FY17-18 and FY18-19, respectively.
 
According to EPFO, it typically takes 20 days to settle a claim or release the PF amount, if all required documents are submitted correctly to the concerned EPFO office. Despite efforts to streamline processes, claims rejection remains a persistent issue for EPFO subscribers.
 
From April 2024, EPFO introduced significant changes that should help individuals when requesting provident fund -PF transfers. Under this new rule, when an individual changes jobs, their old PF balance will be automatically transferred to the new employer, thus eliminating the need for EPFO account-holders to manually request PF transfers when joining a new company. Earlier, despite having a universal account number (UAN), individuals were forced to undergo the hassle of requesting PF transfers which would no longer be necessary.
 
Last week, the government told the Rajya Sabha that the estimated worker population ratio (WPR) indicating employment during the past seven years has increased from 46.8% in FY17-18 to 58.2% in FY23-24.
 
Apart from this, more than 70mn net subscribers have joined Employees' Provident Fund Organisation (EPFO) between September 2017 and September 2024 indicating an increase in formalisation of the job market, Union minister of state for labour and employment Shobha Karandlaje told the upper house.
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