According to the Economic Times, the Employees’ Provident Fund Organization (EPFO) has closed the Covid-19 withdrawal facility, which permitted its members to withdraw a portion of their retirement funds as the disease progresses. Even so, there hasn’t been a formal announcement in this respect yet. This development could not be independently verified by Mint.
During the global pandemic of 2020, EPFO gave its members the option to choose between two advances from their Employees’ Provident Fund (EPF) account.
Under the Pradhan Mantri Garib Kalyan Yojana (PMGKY), a special withdrawal provision was introduced in March 2020 to address members’ financial needs during the pandemic. The Employees’ Provident Funds Scheme, 1952 was amended to this effect by the Ministry of Labour & Employment by adding sub-paragraph (3) under paragraph 68L and publishing a notice in the Official Gazette.
This clause allowed for non-refundable withdrawals up to 75% of the balance owed to the member in their EPF account, or the equivalent of their basic pay and dearness allowances for a period of three months, whichever was less.
EPFO, the retirement fund body, mandates both employees and employers to contribute 12 per cent of the basic salary and dearness allowance. It not only serves as a tax-saving instrument but also offers higher interest rates on investments.