PF withdrawal for medical emergencies: Here’s what has changed

The Employees’ Provident Fund Organisation (EPFO)’s recently amended rules, allowing contributors easy access to their provident fund, have come as a relief for many who need ready cash for emergencies, especially in case of medical emergencies requiring hospitalization.

The rules were amended last year in view of the COVID-19 pandemic which left many grappling with financial difficulties due to loss of jobs, pay cuts and emergency hospitalisation and treatment.

The amount, popularly known as EPF loan or EPF Advance is non-refundable and besides medical emergency and COVID-19 hospitalizations, can also be availed for marriages, education, purchase of home/plot, home loan payment, lockout of salary, or withdrawal before retirement.

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The advance for medical emergencies can, however, be availed only in case of serious illnesses.

Medical emergency: No prior need of cost estimate

Under the amended rules, EPFO members can now withdraw an advance amount of up to ₹1 lakh from their PF account for medical emergencies without furnishing an estimate of medical expenses from the hospital or documentation.

Under the earlier rules, members were given access to withdraw money only after providing estimates given by the concerned hospital.

It should be noted that only employees covered under CS(MA) rules or the Central Government Health Scheme (CGHS) can avail the benefits of the recently-amended rules.

The withdrawal can be made for patients admitted to government or Public Sector Unit or CGHS-empaneled hospitals. If a patient is admitted to a private hospital, the money will be released only after a thorough background check by a competent authority of EPFO.

How to withdraw money for medical emergency

• Log into your account on epfindia.gov.
• Go to the ‘online services’ tab and click on ‘claim’.
• It will take you to a page where you will be asked to verify your bank details linked to your Universal Account Number (UAN).
• Accept the terms and conditions after reading and click on ‘Proceed for online claim’.
• Select ‘medical emergency’ in the withdrawal option.

The money will be most likely deposited in the user’s account by the end of the day if the application has been made on a working day. The amount can either be directly transferred to the user’s salary account or to the concerned hospital, depending on his or her discretion.

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Checklist before applying for emergency withdrawal

An EPF holder desiring to withdraw money for emergencies must ensure that certain formalities are in place:

The user’s Aadhaar card should be linked to the UAN to deposit money to the PF account. The linking can be done on the EPFO website as well as the UMANG app.

An user should have also completed his or her ‘Know Your Customer’ formality before PF withdrawal.

EPF as personal loan

As mentioned earlier, a partial amount of money from the EPF can also be withdrawn in case of marriage (of self, or children), education (self, son, daughter, brother or sister), purchase of home or plot, home loan payment, to make up for losses caused by natural calamities, loan for expansion or renovation of existing house, pause in income due to loss of job and withdrawal before retirement.

It is to be noted that an applicant must have completed 84 months of service to apply for marriage loan – up to 50 per cent from the PF account.

Similarly those applying for housing loan should have been in service for at least 60 months or five years to avail 36 months of their basic salary along with DA.

Those applying for medical expenses, natural calamities, purchase of equipment by physically handicapped, closure of factory and cut in electricity establishment can claim up to six months of their basic salary and DA.

Members can withdraw 90 per cent of EPF money a year before retirement, but must be above 54 years.

The money is likely to be deposited in the EPF holder’s bank account after the due approval of his or her employer and within 15-20 days of applying.

To avail loan for the above purposes, an applicant will be required to show scanned documents for the purpose he or she has made the application for.

COVID-19 emergencies

In view of the COVID-19 pandemic the EPFO last year amended its rules, enabling PF holders to withdraw money equivalent to three months of their basic salary and dearness allowance or 75 per cent of the total balance in their PF account, whichever of the two is lower, for COVID-19 emergencies.

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No documents or certificates are needed to avail the benefit. All EPF members working in factories or establishments declared affected by COVID-19 by the appropriate government bodies were deemed eligible for the benefit.