EPFO Plans to Increase Auto Settlement Limit to ₹5 Lakh

The Employees’ Provident Fund Organization (EPFO) is considering a significant enhancement to its auto settlement facility, proposing an increase in the withdrawal limit from ₹1 lakh to ₹5 lakh. If approved, this move will benefit over 7.5 crore EPFO members, ensuring faster and more efficient access to their funds.

During a recent meeting, Sumita Dawra, Secretary of the Ministry of Labour and Employment, gave her approval to the proposal. However, the final decision rests with the Central Board of Trustees (CBT), which will review and authorize the recommendation. Once implemented, EPFO members will be able to withdraw up to ₹5 lakh through the auto settlement system, streamlining financial access for urgent needs.

The auto settlement mechanism was introduced in April 2020 to facilitate quicker withdrawals for medical expenses, education, marriage, and house construction. The limit was last revised in May 2024, increasing from ₹50,000 to ₹1 lakh. This enhancement led to a surge in its adoption among members.

As of March 6, 2025, approximately 2.16 crore claims have been processed via the auto settlement mode. The initiative has significantly improved claim settlement speed, with 95% of auto-mode claims being resolved within three days. Additionally, the claim rejection rate has dropped from 50% to 30%, ensuring smoother transactions for EPFO members.

This proposed increase in the auto settlement limit is expected to provide greater financial flexibility, allowing members to access their funds swiftly and with minimal procedural delays.