In a significant move to enhance accessibility and improve service delivery, the Employees’ Provident Fund Organisation (EPFO) has raised the auto-settlement limit for advance withdrawal claims from ₹1 lakh to ₹5 lakh. This change allows EPFO members to receive up to ₹5 lakh within three working days, without human intervention, for pre-approved withdrawal purposes.
Objective: Faster Disbursement in Times of Urgent Need
Union Labour Minister Mansukh Mandaviya stated that the increase in the auto-settlement limit aims to provide faster fund access, especially during urgent or unforeseen financial needs. This step aligns with the government’s focus on automation and transparency in managing employee benefits and social security.
Background: Evolution of the Auto-Settlement Facility
The online auto-settlement system was introduced by EPFO during the COVID-19 pandemic to address immediate cash requirements for its members. Initially designed for medical emergencies, the system has now expanded to include claims related to illness, education, marriage, and housing. These claims undergo digital processing for quick turnaround, transparency, and elimination of human bias or delays.
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Key Features of the Auto-Settlement Facility:
- Illness
- Education
- Marriage
- Housing
Massive Growth in Auto-Settled Claims
Recent statistics shared by Mandaviya indicate a significant increase in digitally processed claims by EPFO:
- In FY 2024-25, EPFO auto-settled 2.34 crore advance claims, marking a 161% rise from the previous fiscal year.
- Within the first 2.5 months of FY 2025-26, 76.52 lakh claims have been auto-settled, constituting 70% of the total advance claims processed so far.
- The proportion of auto-settled claims increased from 31% in FY24 to 59% in FY25.
Impact: Improved Access and Member Confidence
The enhancement in the auto-settlement limit is expected to benefit numerous EPFO members, particularly during urgent needs like medical treatments or higher education expenses. This initiative supports the government’s objectives to empower salaried and retired individuals, fortify India’s social security framework, and modernize public service delivery.
Key Takeaways for Competitive Exams:
- EPFO raised the auto-settlement limit for advance withdrawal claims from ₹1 lakh to ₹5 lakh.
- Members can now receive up to ₹5 lakh within three working days for pre-approved withdrawal purposes.
- The increase in auto-settlement aims to provide faster fund access during urgent financial needs.
- EPFO’s digital processing of claims has shown remarkable growth, highlighting its commitment to efficient fund disbursement.
- The move aligns with the government’s vision to strengthen social security and enhance service delivery for employees.
