The government is looking to cap premature provident fund withdrawals at 75 per cent for EPFO subscribers at any given time till the age of 58.
Under the existing provisions, Employees Provident Fund Organisation (EPFO) subscribers can withdraw the entire amount by showing not employed anywhere for two months.
The proposal regarding changes in 'The Employees' Provident Fund Scheme' has been sent to the Labour Ministry for approval.
"We will take a decision in this regard in the next 10-15 days," Labour Secretary Shankar Aggarwal said.
Central Provident Fund Commissioner K K Jalan also said the proposed changes are likely to be notified in the next 10-15 days, as it has got the backing of employee unions.
Asked whether the 75 per cent withdrawal ceiling has been proposed for even circumstances like constructing a house, marriage, children's education, etc, Jalan replied in the affirmative.
The idea behind the proposal, he said, is to ensure that provident fund is used as an old-age security and not misused for purposes other than it was meant to be.
The provident fund money, he said, should be used as an old-age security scheme and not like a savings bank account. Jalan added the EPFO plans to gradually further cap the withdrawal limit to up to 50 per cent and also put a ceiling on the number of withdrawals by a subscriber.
"Presently, out of the 1.3 crore annual claims, not less than 65 lakh claims are for full withdrawal. If the proposal is implemented by the Centre, the total number of claims would come down to 50 lakh," Jalan said.
Elaborating on the rationale behind the 75 per cent cap proposed, he pointed out that the contribution of an employer including interest, in any case, does not exceed more than 75 per cent of the total contribution.