EPFO Update: Can EPF Members Still Withdraw Funds From Covid Advance Facility?

EPF members may now not be able to withdraw funds from the Covid advance facility as the retirement fund body The Employees' Provident Fund Organisation (EPFO) has reportedly terminated this special fund withdrawal facility that was granted to subscribers to take out a part of their retirement savings as Covid advance. The move comes almost seven months after the World Health Organisation (WHO) declared an end to Covid-19 as a public health emergency.

The EPFO announced this decision in a formal meeting with its officials a week ago, according to the Economic Times report citing an EPFO official who attended the meeting.

"While a notification in this regard is yet to be issued, efforts are being made to disable the provision of non-refundable Covid advance in the software, so that subscribers can no longer apply for it," said the the official.

According to experts, the move is expected to impact consumption as much of the COVID advance was being used for discretionary purchases and other expenses. They also said the decision has come too late and that it had impacted the availability of funds at EPFO's disposal.

As per the report, a staggering 2.2 million EPFO subscribers availed the Covid advance in the three fiscal years starting from 2020-21, amounting to Rs 48,075.75 crore, as per the EPFO's draft annual report for 2022-23. The retirement fund body disbursed Rs 17,106.17 crore benefiting 69.2 lakh subscribers in 2020-21, Rs 19,126.29 crore benefiting 91.6 lakh subscribers in 2021-22, and Rs 11,843.23 crore benefiting 62 lakh subscribers in 2022-23.

The government amended the rules of the EPF Scheme, 1952, in March 2020 to facilitate non-refundable advance to EPF members not exceeding the basic wages and dearness allowances for three months, or up to 75% of the amount standing to a member's credit in the EPF account, whichever was less, in the event of an outbreak of an epidemic or a pandemic.

There has been a recent surge in COVID-19 cases in India. As of December 27, 2023, India currently has 4093 active COVID cases. Kerala has the highest number of COVID cases at 2954.