Provident fund acts as social security cover for lakhs of employees
Employees’ Provident Fund, or popularly called Provident Fund (PF), is a long-term investment instrument created by contributions from the employee, employer and in some cases the government. In simple words, PF is a social security program run by the Employees’ Provident Fund Organization (EPFO). Employees use this as a means of providing them with a financial safety net when they retire from service. The amount deposited over the years in the PF account, along with specified interest, is paid to the employee on his retirement.
When can you withdraw?
Withdrawal of Provident Fund can be made by the employee in the following cases:
– At the time of retirement (at or after the age of 58 years).
If you have been unemployed for two months.
– By the nominee in case of death of the employee before the age of retirement.
However, amid the coronavirus pandemic, EPF last year revised several withdrawal rules to make it easier for people facing financial difficulties. The new rule states that PF account holders can withdraw money equal to three months of their basic salary and dearness allowance or 75 percent of the total balance in their PF account, whichever is less. A significant change was made to allow withdrawal of PF corpus to a person facing unemployment before retirement due to lockdown or layoff.
how to do that?
Withdrawal of money from PF accounts can be claimed online. These claims should be settled within three working days whereas offline claims may take up to 20 days. Follow these steps to withdraw PF money online:
Step 1: Open the EPFO Member Portal.
Step 2: Under the “Services” tab, select the “For Employees” option.
Step 3: On the new webpage, click on the option “Member UAN/Online Service (OCS/OTCP)”.
A new window will open.
Step 4: Log in to the portal using UAN, password and captcha code.
Step 5: Select the “KYC” option under the “Manage” tab.
Step 6: You will be redirected to a new webpage. At the bottom of the page, find the section “Digital Accepted KYC” and check your KYC details. Make sure the details are correct.
Step 7: To complete the withdrawal, go to the top menu and select “Online Services”.
Step 8: Click on the option “Claim (Form-31, 19 & 10C)” from the dropdown menu.
There are different riders and limits for withdrawing money for different reasons.
You can cite these reasons for withdrawing PF money:
– Housing loan for construction or purchase of house. For this you have to be in service for at least 60 months.
– For self, children, marriage of siblings or post-matriculation education of children. Minimum 84 months of service is required for this claim to be accepted.
One year before retirement, you can withdraw up to 90% of your PF money. But your age should be above 54 years.
You can use a part of your PF money for medical expenses, natural calamities, purchase of equipment by physically challenged, closure of factories, power cuts in establishments.