According to a post on X, the Employee Provident Fund Organization (EPFO) has significantly improved its claim settlement processes. As of 26 November 2024, the combined rejection and return ratio stood at 21.59 per cent. This includes 13.77 per cent of inadmissible claims. Returns (deficiency in claims) stood at 7.82 per cent. The final withdrawal claims reflect 11.92 per cent rejections and 13.44 per cent return cases. 

According to official data from EPFO for the financial year 2022-23, out of 7.38 million claims received for final PF settlement, 33.8 per cent (2.49 million) were rejected, while 4.66 million were settled.

The rejection rate in 2022-23 is significantly higher compared to previous years, with rejection rates of around 13 per cent and 18.2 per cent in 2017-18 and 2018-19, respectively. The rejection rate continued to rise in subsequent years, reaching 24.1 per cent in 2019-20 and 30.8 per cent in 2020-21 for final settlement claims. In the financial year 2021-22, the rejection rate further increased to 35.2 per cent for final settlement claims. The recent numbers thus show a large improvement. 

Normally, claims are rejected when the claimant is not eligible for the type of advance or withdrawal. So, before making a claim it is important to understand whether you are eligible to make a claim and if yes, how much claim you can make under the given rules. Claims are also returned if there is any deficiency. Returned claims can be resubmitted after making suitable corrections.

Another major reason for higher claim rejections was the complete shift to the online system for processing claims. Previously, document verification for claims primarily occurred at the employers’ end before reaching EPFO. However, with the shift to Aadhaar-linked online processing, 99 per cent of the claims now go through the online portal.

Another reason why one’s EPF claim may be rejected is incomplete or erroneous documentation. Instances of missing signatures, incomplete forms, or discrepancies in the provided information can hinder the processing of claims. So, meticulous attention to paperwork is crucial. Here is what you can do to minimize the chances of your EPFO claim rejection.

There were several systematic improvements in the works by the EPFO including superior technology upgrades, proactive data cleaning to minimize foreseeable errors, and proper KYC. The efforts seem to be paying off.