New Delhi: In a major policy shift aimed at increasing financial security and flexibility for workers, the Employees Provident Fund Organisation (EPFO) has now allowed full withdrawal — up to 100 percent
— of the eligible balance in members EPF accounts. The move comes just ahead of Diwali and is expected to benefit more than seven crore subscribers across the country.
This significant step was taken during the 238th meeting of the Central Board of Trustees (CBT) held in New Delhi on Monday. The board, chaired by Labour Minister Mansukh Mandaviya, agreed to ease withdrawal rules in line with the changing needs of the modern workforce.
Why the Government Took This Step?
The government’s decision reflects a growing recognition of the need for greater access to personal savings in an uncertain job market. With rising instances of career shifts, layoffs, gig work, and self-employment, the earlier rules — which allowed full withdrawal only after retirement or in case of unemployment — were seen as restrictive.
Now, by allowing 100 percent withdrawal of the eligible balance (including both employee and employer share), the government aims to offer financial support and independence during key life stages or emergencies, without forcing workers to leave funds locked away unnecessarily.
Simplified Rules for Partial Withdrawals
The EPFO has also streamlined the complex rules around partial withdrawals. Thirteen different withdrawal conditions have been merged into three broad categories: essential needs (like illness, education, marriage), housing needs, and special circumstances.
Withdrawal limits have been liberalised as well. For example, withdrawals for education are now allowed up to 10 times, and for marriage up to 5 times — a major jump from the earlier combined limit of three times. The minimum service requirement for all partial withdrawals has been reduced to just 12 months.
New Provision to Maintain Minimum Balance
To ensure long-term savings are not fully depleted, a new rule requires EPF members to maintain at least 25 percent of contributions as ‘Minimum Balance’ in their account at all times. This safeguards retirement funds while allowing greater liquidity when needed.
