EPFO auto-settlement limit hiked to Rs 5 lakh for faster payout

Union Labour Minister Mansukh Mandaviya announced on Tuesday that the Employees’ Provident Fund Organisation (EPFO) has increased the auto-settlement limit for advance claims from Rs 1 lakh to Rs 5 lakh. This enhancement will enable members to access funds within three days during urgent needs.

At present, auto-settlement, which ensures claim processing within 72 hours, was capped at Rs 1 lakh. The raised limit aims at streamlining financial support for purposes such as medical emergencies, education, marriage and housing.

Additionally, the subscribers may soon be able to withdraw their EPF directly from their accounts through ATMs or other modes like UPI after linking their bank accounts with EPF. An official source said the ministry was working on a project where a certain proportion of the EPF would be frozen and a large chunk would be available for withdrawal through their bank account using various modes like UPI or ATM debit cards.

Introduced during the Covid pandemic for swift disbursals, the auto-settlement system processes claims without manual intervention, ensuring transparency and efficiency. The initiative has seen significant adoption, with EPFO settling a record 2.34 crore advance claims in 2024–25, marking a 161 per cent surge from 89.52 lakh claims in the previous fiscal. Notably, 59 per cent of total advance claims last year were auto-settled, up from 31 per cent in 2023–24.

The trend continues in the current fiscal, with 76.52 lakh claims already processed automatically in the first two-and-a-half months, accounting for 70 per cent of all advance settlements.

In another user-friendly step, the EPFO has eliminated the need for uploading cheque leaf/bank passbook images and removed employer approval for seeding bank accounts with the Universal Account Number (UAN), further speeding up claim settlements.