The Employees’ Provident Fund Organisation (EPFO) has rolled out a revamped set of partial withdrawal rules under its upgraded EPFO 3.0 system, aiming to make withdrawals more flexible, uniform, and easier
for subscribers.
The changes were approved by the Central Board of Trustees, the apex decision-making body of the EPFO, chaired by Union Labour Minister Mansukh Mandaviya, at a meeting held on October 13.
The revised framework standardises eligibility conditions across most withdrawal categories and expands access in certain cases, especially during unemployment, education, and marriage-related needs.
Here’s a simplified breakdown of what’s new and how it compares with the earlier rules.
Withdrawal During Unemployment: More Immediate Access
Under the earlier system, EPF members could withdraw 75% of their corpus after one month of unemployment, and the remaining 25% after two months.
Under EPFO 3.0, subscribers can now withdraw 75% of their EPF balance immediately after becoming unemployed. However, full withdrawal of the EPF balance will be allowed only after 12 months of continuous unemployment.
Pension Withdrawal After Job Loss: Longer Waiting Period
Earlier, members could withdraw their pension amount after two months of unemployment.
Under the new rules, this waiting period has been significantly extended. Pension withdrawal will now be permitted only after 36 months of unemployment, tightening access to pension funds after job loss.
Lockout or Closure of Establishment: Clearer Limits
Previously, in cases of lockout or closure, withdrawals were capped at the employee’s share or up to 100% of the total share, depending on circumstances.
Now, EPFO 3.0 allows members to withdraw up to 75% of their EPF corpus, while 25% must be retained as a minimum balance.
Epidemic or Pandemic: Rules Aligned With Uniform Framework
Earlier, members could withdraw up to three months’ basic wages plus dearness allowance (BW + DA) or 75% of their EPF balance, whichever was lower.
The new rules broadly retain this structure but bring it under a standardised service eligibility framework, making processing more uniform across cases.
Natural Calamities: Service Condition Standardised
Previously, withdrawals during natural calamities were limited to Rs 5,000 or 50% of the member’s own contribution with interest, whichever was less.
Under EPFO 3.0, while withdrawal limits remain broadly similar, the minimum service requirement for all partial withdrawals — including natural calamities — has been standardised at 12 months.
Medical Treatment: Structure Retained, Rules Simplified
For medical treatment of self or family, members earlier could withdraw up to six months’ BW + DA or their own contribution, whichever was lower, and this was allowed multiple times.
This benefit continues under EPFO 3.0, but it now falls within the uniform 12-month minimum service condition, simplifying eligibility.
Education and Marriage: Higher Withdrawal Frequency Allowed
Earlier, EPF subscribers could withdraw up to 50% of their contribution after seven years of service, with withdrawals limited to three times for education and two times for marriage.
Under the new system, EPFO has relaxed the frequency limits:
- Education-related withdrawals: up to 10 times during service
- Marriage-related withdrawals: up to 5 times during service
This change significantly improves flexibility for long-term subscribers.
Buying or Building a House: Shorter Service Requirement
Earlier, EPF withdrawals for purchasing or constructing a house or buying a plot required 24 to 36 months of service and were allowed only once.
Under EPFO 3.0, the minimum service requirement has been reduced to 12 months, in line with the standardised rule for partial withdrawals.
Home Improvement and Alteration: No Major Change
For additions, alterations, or improvements to an existing house, members were earlier allowed to withdraw up to 12 months’ BW + DA or their own contribution, whichever was lower.
These conditions continue under the new framework, without major changes.
Housing Loan Repayment: Same Limits, Faster Processing
Earlier rules allowed withdrawal of up to 36 months’ BW + DA, total EPF balance, or outstanding loan amount, whichever was lower, once during service.
EPFO 3.0 retains the same eligibility limits but introduces simpler and faster digital processing, making loan repayment withdrawals smoother.
Purchase of Flat or Dwelling House: Status Quo Maintained
Members were earlier allowed to withdraw up to 90% of the total EPF balance with interest or the cost of the house, once during service.
This provision remains unchanged, though digital processing under EPFO 3.0 is expected to reduce delays and paperwork.
What This Means for EPF Subscribers
The EPFO 3.0 overhaul focuses on uniformity, digital ease, and greater flexibility, especially for long-term contributors. While access to pension funds after job loss has been tightened, rules around education, marriage, housing, and emergencies have become more subscriber-friendly.
Overall, the changes aim to balance financial discipline with real-life liquidity needs, while ensuring smoother online claim processing going forward.
