Union Labour Minister Mansukh Mandaviya on Tuesday announced a significant enhancement to the Employees' Provident Fund Organisation (EPFO) services. The limit for auto-settlement of advance withdrawal claims has been increased from ₹1 lakh to ₹5 lakh.
“The EPFO has increased auto-settlement limit for advance claims from Rs 1 lakh to Rs 5 lakh to facilitate faster fund access for EPFO members, especially in times of urgent needs,” Union Labour Minister Mansukh Mandaviya said while addressing reporters.
This move will now enable EPFO members to receive advance withdrawal claims of up to ₹5 lakh within just three days, significantly improving access to funds during urgent situations.
The auto-settlement facility, first introduced during the COVID-19 pandemic to provide timely financial aid, has now become a critical part of EPFO’s digital transformation. It allows claims to be processed entirely by the system, ensuring faster turnaround, greater transparency, and zero human intervention.
The automated system covers advance claims for key life events such as:
Illness
Education
Marriage
Housing
These services ensure that EPFO members can access their funds without delays in emergencies.
“In FY25, the EPFO processed a record 2.34 crore advance claims through auto-settlement, 161 per cent higher compared to 89.52 lakh claims settled in FY24,” Mandaviya stated.
He further highlighted:
“59 per cent of all advance claims in 2024-25 were settled through auto mode as compared to 31 per cent in 2023-24.”
Within just the first 2.5 months of FY26, EPFO has already auto-settled 76.52 lakh claims, accounting for 70 per cent of all advance claims processed so far.
“This growth highlights EPFO's strong focus on automation and delivering faster, more efficient services to its members,” the minister emphasized.
The recent upgrade in auto-settlement limits aligns with EPFO’s vision of streamlining claim settlements and making its systems more user-centric and responsive.
The Employees' Provident Fund Organisation (EPFO) stands as one of the largest social security organizations globally, playing a pivotal role in ensuring the financial well-being of the organized sector workforce in India. Its history is a testament to India's commitment to social security and welfare for its working population.
The concept of a provident fund (PF) in India is not entirely a post-independence phenomenon.
Early 20th Century: Some private companies and government departments had their own provident fund schemes, though these were limited in scope and not uniformly regulated.
1929: The Royal Commission on Labour highlighted the urgent need for establishing provident funds for industrial workers across the country. This was a significant recommendation that laid the groundwork for future legislation.
Post-Independence Discussions (1940s): After India gained independence, the importance of a structured social security program became even more apparent. The Indian Labour Conference in 1948 generally agreed that a statutory provident fund for industrial workers was essential.
Coal Mines Provident Fund Scheme (1948): The successful implementation of the Coal Mines Provident Fund Scheme in 1948 served as a crucial precedent and fueled the demand for similar schemes in other industries.
The Directive Principles of State Policy in the Constitution of India (enacted in 1950) also emphasized the State's responsibility to make effective provisions for public assistance in cases of unemployment, old age, sickness, and disablement, further solidifying the need for a comprehensive provident fund system.
The concrete steps towards establishing a nationwide provident fund began in the early 1950s:
November 15, 1951: The Employees' Provident Funds Ordinance was promulgated. This marked the official genesis of the Employees' Provident Fund in India, a temporary measure to immediately address the social security needs.
This Act is now famously referred to as The Employees' Provident Funds & Miscellaneous Provisions Act, 1952, and it extends to the whole of India, except Jammu and Kashmir (though some provisions might apply there based on subsequent legal developments). The Employees' Provident Fund Organisation (EPFO) was established to administer this Act and its various schemes.
Over the decades, the EPFO's mandate and the schemes it administers have expanded significantly to provide a more holistic social security net:
Employees' Family Pension Scheme, 1971: Recognizing that the provident fund alone might not be sufficient for a deceased employee's family, this scheme was introduced to provide a monthly pension to the family members. A portion of the PF contribution from both employee and employer, along with a Central Government contribution, was diverted to this fund.
In recent years, EPFO has undergone significant modernization and digital transformation to enhance service delivery and improve efficiency, especially considering it manages a massive clientele and volume of financial transactions:
Today, the EPFO operates under the administrative control of the Ministry of Labour and Employment, Government of India. It is the apex decision-making body for the Central Board of Trustees (CBT), Employees' Provident Fund, which comprises representatives from the government (central and state), employers, and employees.
The EPFO manages assets worth over ₹15.6 lakh crore (US$209 billion as of 2021) and serves millions of subscribers, making it one of the largest social security organizations in the world. Its continuous efforts towards digitalization, stringent enforcement, and adherence to global social security standards underscore its vital role in providing financial security and stability to the Indian workforce, especially during old age, disability, or for their dependents.
The EPFO’s decision to increase the auto-settlement limit for advance withdrawals from ₹1 lakh to ₹5 lakh marks a major leap in providing faster and more efficient financial access to its over 7 crore members.
By ensuring that claims up to ₹5 lakh are processed within three days without human intervention, the organization is reinforcing its commitment to digitization, transparency, and user-centric service. The rapid increase in auto-settled claims—from 89.52 lakh in FY24 to 2.34 crore in FY25—clearly reflects growing user trust and the system’s efficiency.
Moreover, the early figures from FY26 indicate a continuation of this trend, with 70% of claims already processed via automation in just 2.5 months. This initiative not only empowers EPFO members during critical life events such as illness, marriage, or housing but also sets a benchmark for government-backed financial systems aiming for digital transformation and enhanced public service delivery in India.