How To Activate Inoperative UAN-Linked EPFO Accounts And Settle Claims?

For employees who are covered by the Employees' Provident Fund, the Employees' Provident Fund Organisation (EPFO) is essential to maintaining social security benefits. There are scenarios where some accounts are categorised as "Inoperative Accounts" under the EPF Scheme. Because of this categorization, these accounts are no longer eligible to receive interest, which emphasises the significance of a thorough verification process. EPFO recently established the latest Standard Operating Procedure (SOP) for addressing such inactive accounts linked to UAN.

According to an EPFO circular dated 7th February 2024, the current Standard Operating Procedure (SOP) delineates a comprehensive framework encompassing various crucial aspects within the EPFO. It describes in detail the procedural nuances pertaining to the establishment and linked with UANs, the seeding of KYC, the blocking and unblocking of accounts, and the resolution of disputes involving transaction-less accounts and inoperative accounts.

When Does EPFO Consider An Account As Inoperative?

According to the Employees' Provident Funds Scheme, 1952, "Any amount becoming due to a member as a result of: (i) supplementary contribution from the employer in respect of leave wages/arrears of pay, instalment of arrear contribution received in respect of a member whose claim has been settled on account but which could not be remitted for want of latest address, or (ii) accumulation in respect of any member who has either [retired from service after attaining age fifty-five years or migrated abroad permanently] or died, [but no application for withdrawal under paragraph 69 or 70 has been preferred] within a period of [thirty six months] from the date it becomes payable, or if any amount remitted to a person, is received back undelivered, and it is not claimed within a period of [thirty six months] from the date it becomes payable, shall be transferred to an account to be called the [Inoperative Account]."

"Provided that in the case of a claim for the payment of the said balance, the amount shall be paid by debiting the [Inoperative Account]. Provided further that if any amount becoming due to a member, as a result of supplementary contributions on account of litigation or default by the establishment or a claim which has been settled but is received back undelivered not attributable to the member, shall not be transferred to the Inoperative Account," the rule further state in paragraph 72.

The inoperative accounts that fall in the category of transaction-less accounts shall be governed as per the process laid out in the SOP. The application software will flag all such inoperative accounts. However, all the inoperative accounts that do not fall in the category of transaction-less accounts shall be governed as below, according to EPFO.

Inoperative accounts that do not have UAN

Inoperative accounts that already have a UAN

How to activate inoperative EPFO accounts (which are inoperative for less than 3 years) linked to UAN (KYC seeded)?

Members whose UAN is KYC-seeded can generate an online request to unblock the Inoperative account. Once the member raises the request through the member portal, it will land in the Employer's login. The employer shall either accept or reject the request. If the request is accepted, the same shall be available in the login of the concerned DA, along with the comments of the employer. The authorities who shall approve the UAN unblock request shall be decided as below:

Once the request is approved, the account will be unblocked, and members can file online claims. However, if the UAN is linked to any other working/live PF account, members shall be allowed to apply for transfer claims only. If the member has no other active account, he may apply for the final withdrawal.

In case the employer or the field office rejects the request, it will land in the login of the member along with the comments/reasons for rejection.

The employer shall have 15 days to process the request, failing which the same shall automatically come to the DA's login.

In case the establishment is marked as closed, the member's request shall directly land into the login of the DA.
The field office shall have 15 days to process the request.

The claim settlement process for such accounts shall be governed by the normal delegation of power.

How to unblock inoperative accounts (which are inoperative for more than 3 years) linked to UAN (KYC seeded)?

Members whose UAN is KYC-seeded can generate an online request to unblock the Inoperative account. Once the member has raised the request for unblocking either through the member portal or physically visiting the concerned office, the OIC will trigger the verification process.

The OIC will also monitor that the DA (Accounts) triggers the file for verification as per the timelines.

Once the request is approved, the account will be unblocked, and members can file online claims. However, if the UAN is linked to any other working/live PF account, members shall be allowed to apply for transfer claims only. If the member has no other active account, he may apply for the final withdrawal.

How to activate inoperative EPF accounts linked to UAN (KYC not seeded)?

Members whose UAN is not KYC seeded shall approach the concerned employer to get their KYC seeded.
In case the establishment is closed, the member has to physically visit the field office to get the KYC seeded.
Members can then generate an online request to unblock the Inoperative account. Once the member has raised the request for unblocking either through the member portal or physically visiting the concerned office, the OIC will trigger the verification process.

The OIC will also monitor that the DA (Accounts) triggers the file for verification as per the timelines given in Para 8 of the SOP.

It may be noted that the above verification process shall not apply to such inoperative accounts that have been frozen as per the various categories defined under "SOP for Freezing and De-freezing." Such accounts shall be governed as per the said SOP.

How To Make Claim Settlements?

Once the request for unblocking is approved, the members can file online claims. The field offices shall ensure and assist the member in filing all types of claims as per his/her eligibility.

In a regular course, EPFO exercises two-level approvals for claim settlements less than Rs. 5 lacs and three levels for claims more than Rs. 5 lacs. However, another layer of security shall be put in place for handling claims pertaining to these MIDs. Drawing from the above, the verification will go through an additional level of scrutiny, according to the SOP generated by EPFO.

When the claims with respect to the above-unblocked cases are entered into the application software, an additional flag will be shown. Thus, every such claim will undergo an additional layer of scrutiny in the application software itself. Until the process is instituted in the application software, the extra layer of scrutiny shall be through the e-file as a temporary arrangement after obtaining approval from the concerned authorities.