The Employee Provident Fund (EPF) or Provident Fund (PF) is an important government-backed scheme where both the employer and employee contribute 10 percent of the employee’s basic salary every month.
Earlier, it was 12 percent for private organisations. The employer and employee deposit their contribution with the Employee Provident Fund Organisation (EPFO) every month. This can be further withdrawn in certain events like retirement, or resignation. However, due to the COVID-19 pandemic, the EPFO has now allowed the members to withdraw a part of the amount in case of these crises.
Check the latest PF withdrawal updates by EPFO.
COVID Advance Facility after leaving the service
When it comes to financial difficulties due to the Covid-19, the government has announced that a person can withdraw a part of the amount from its EPF account. The EPF Scheme, 1952 provides for the grant of advance to its members in case of an epidemic. A person can obtain an advance from its EPF balance up to three months of basic salary plus dearness allowance, or 75 per cent of the balance standing in its account, whichever is less. This advance is non-refundable and the person will not have to deposit the withdrawn money back into its EPF account.
Avail Non-Refundable Advance in case of Unemployment
Employees who remain unemployed for a longer period of time will be allowed to avail a non-refundable advance of up to 75 per cent of the amount available in their PF account. The EPFO recently tweeted that “Members who are no longer employed for one month or more can avail a non-refundable advance of up to 75 per cent of the amount available in their PF account.” The auto-mode of settlement enables EPFO to reduce the claim settlement cycle to just 3 days, against the statutory requirement to settle the claims within 20 days. This amount can be transferred from one company to another in case the employee changes his job. EPF account yields a return of 8.5 per cent annually.
Second COVID-19 Advance to meet financial needs
A person can get a second COVID-19 advance from its EPF balance up to three months of basic salary plus dearness allowance, or 75 per cent of the balance standing in its account, whichever is less. This advance remains non-refundable, and the person will not have to deposit the withdrawn money back into its EPF account.
EPF EDLI scheme
EPFO has also stated that if a Provident Fund account holder dies due to any reason, including COVID-19, then his family will get a maximum amount of Rs 7 lakh as part of the Employee’s Deposit Linked Insurance (EDLI) Scheme. The maximum threshold was earlier Rs 6 lakh and now it has been increased to Rs 7 lakh. The minimum amount threshold has been kept at Rs 2.5 lakh.
ESIC COVID-19 relief Cover
The families of workers who died due to COVID-19 pandemic can get Employees State Insurance Corporation (ESIC) Pension and Insurance Benefits. Prime Minister Narendra Modi had earlier announced the liberalisation and expansion of various such schemes. The families of those, who died due to COVID-19, will get the pension, along with enhanced and liberalised insurance compensation under the Employees State Insurance Corporation, and the Employees Deposit Linked Insurance Scheme (EDLI), respectively.
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