No Big Surge In EPF Withdrawals During Covid-19 Lockdown

This is an indication that many low-wage earners in the organised sector were also under financial stress due to lockdown.

The Employees’ Provident Fund Organisation (EPFO) on Tuesday said 98% of 36.02 lakh subscribers who withdrew part of the funds from their retirement savings in April-May earn up to Rs 50,000 a month. Also, 74% of the withdrawals were by those earning Rs 15,000 a month or less.

This is an indication that many low-wage earners in the organised sector were also under financial stress due to lockdown. But the number of subscribers who withdrew EPF funds during the first two months of current fiscal was only 7% higher than the same period last year, implying that the lockdown hasn’t resulted in a big jump in withdrawals.

Preventing those earning less than Rs 15,000 a month from falling into indebtedness, EPFO had provided them with a special one-time facility of withdrawing a sum equivalent to their three months’ basic wages and dearness allowance or 75% of the amount standing to their credit in the EPF account, whichever is less.

“As per the EPFO data, the number of claims settled in April and May this year has gone up by around 7% over the April-May number of 2019. In fact, the growth of withdrawal in April-May, 2019 over April-May, 2018 was nearly at the same level, if not more,” said former central provident fund commissioner (CPFC) K K Jalan.

Source: Financial Express

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