The Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) has decided to amend the rules for interest payments in EPF. The CBT, responsible for decision-making for the EPFO, made this decision during a meeting chaired by the Union Minister for Labour and Employment and Youth Affairs and Sports, Mansukh Mandaviya. In its 236th meeting held on November 30, 2024, the board resolved to change the interest payment date to the date of settlement.

What Is The Amendment In Interest Payment Rule:

The board approved the amendment in the EPF Scheme, 1952. As per the change, the interest on EPF will be paid to the members up to the date of settlement.

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What Is The Existing Rule For Interest Payment On EPF Claims?

As per the existing rule, if someone makes a claim for fund withdrawal up to the 24th of a month, the interest is paid up to the end of the previous month. So, there is an interest loss for members for days exceeding the previous month.

The EPFO provisions read, “Interest up to and for the current month shall be payable on the claims which are authorised on or after the 25th day of a particular month along with actual payment after the end of the current month.”

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How Will This Change In Interest Payment Rule Impact A Member?

This amendment allows interest payments up to the date of settlement, resulting in higher interest for members. It will also change the settlement process, as claims will now be settled throughout the month, unlike the current practice where claims are not processed between the 25th and the end of the month to avoid interest loss to members.

Now, the interest will be calculated to the date of settlement, and claims will be processed throughout the month and not in monthly batches. This would mean a timely settlement of claims and a higher interest amount if the settlement is delayed.

Notably, in the financial year 2023-24, the retirement body has settled 4.45 crore claims worth Rs 1.82 lakh crore. Compared to this, it has settled 3.83 crore claims already in the current year for around 1.57 lakh crore.

Also Read: EPF: Plans Underway To Remove 12% Cap On Employees’ Contributions, Enable PF Withdrawals Through ATMs   

Other Key Changes For EPF Members:  

• The board has approved extending the Employees' Deposit-Linked Insurance (EDLI) to beneficiaries with retrospective effect from April 28, 2024. The scheme offers up to Rs 7 lakh life insurance cover to the dependents of EPF members in case of death

• The other important approval was empanelling more banks to collect EPF contributions, including even those scheduled banks that are not RBI agency banks but collect a minimum of 0.2 per cent of the total EPFO collection. It revised the eligibility criteria for such banks from 0.5 per cent collection to 0.2 per cent

• The auto settlement claims amount limit that was first extended to medical claims from Rs 50,000 to Rs 1 lakh is also extended to housing, marriage, and education purposes claims.