PF Withdrawal: The Covid-19 pandemic has battered economies of countries across the world and India is no exception. Several sectors in the country are yet to recover from the pandemic-induced financial blow they faced. The first two waves of Covid-19 left many unemployed, with families staring at financial crunch amid medical emergencies.
What did the EPFO Announce and What are the Rules?
To face this, the government had in 2020 during the first wave allowed Employees’ Provident Fund (EPF) members a Covid-19 advance. This was a completely tax free and non refundable option for the employees who had lost jobs or were facing a financial crisis due to the pandemic. Under the Pradhan Mantri Garib Kalyan Yojana (PMGKY), the EPFO had in March 2020 allowed its subscribers to withdraw up to 75 per cent of the balance standing as credit in their account or a sum up to three months of basic salary plus DA, whichever was lower.
“Under this provision, non-refundable withdrawal to the extent of the basic wages and dearness allowances for three months or up to 75% of the amount standing to member’s credit in the EPF account, whichever is less, is provided. Members can apply for lesser amount also,” the labour ministry said.
In 2021, when the country was battling with the second wave of Covid-19, the labour ministry announced that those who had availed the loan can again use the service under the same circumstances.
You can avail this service online using your Universal Account Number (UAN), bank details and specifying the reason for your withdrawal of the money.
What it Means for Investors
“The COVID-19 advance has been a great help to the EPF members during the pandemic, especially for those having monthly wages of less than Rs. 15,000. As on date, EPFO has settled more than 76.31 lakh COVID-19 advance claims thereby disbursing a total of Rs. 18,698.15 crore,” the labour ministry said in a statement while announcing the service for the second time.
The move by the government helped numerous members of the EPFO who were faced with a sudden job loss or medical emergencies and did not want to pile up the burden of loans, which can often be expensive.
The loans have been disbursed within 20 days of claims if the KYC of the investor was complete, the labour ministry had said. This meant that investors did not have to wait for much time after making the claim.
What are the Possibilities Now?
With the third wave already settling in, there is a chance that the government might again extend this scheme to withdraw Covid-19 advance from EPF. The Omicron variant of Covid-19 has created a medical emergency across the country again, with deaths and hospitalisations going up. As per latest data, between April 1, 2021 and November 30 2021, the EPFO had settled a total of 68.10 lakh Covid-19 advance claims, disbursing an amount of Rs. 14,242 crore to PF members
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