In a significant move aimed at easing financial stress for retiring or exiting employees, the Employees’ Provident Fund Organization (EPFO) has issued a directive to allow part payment of final PF settlement claims even if certain formalities remain incomplete.
This decision addresses a common concern faced by many EPF members—the rejection of final settlement claims due to discrepancies such as short or non-remittance of contributions by the employer or pending transfer of past PF accumulations from previous accounts.
What Has Changed?
EPFO, through a circular, has emphasized the implementation of an existing provision under Para 10.11 of the Manual of Accounting Procedure (Part-IIA). This provision clearly permits part settlement of claims where full payment is not immediately possible due to administrative or employer-related issues.
Until now, many claims were outright rejected when:
- Employers failed to deposit full contributions for certain periods,
- The member’s earlier PF account balances were not transferred into the current account.
With this new push, EPFO instructs all its field offices to stop rejecting such claims and instead process part payments based on whatever balance is currently available in the member’s PF account.
Key Highlights:
- 🟢 Part payment of PF final settlements is now allowed even if contributions are missing or past PF accumulations are not transferred.
- 📜 This is based on Para 10.11 of the Manual of Accounting Procedure Part-IIA.
- ❌ Offices must not reject PF claims for such reasons.
- 💰 Members will receive the available PF balance immediately, avoiding unnecessary delays and financial distress.
- 📦 Once the pending employer contributions or transfers are received, the remaining balance will be paid to the member without further delay.
Why This Matters
For thousands of employees, Provident Fund savings are a critical financial lifeline, especially upon retirement, resignation, or job loss. Any delay or rejection in claim settlement can lead to serious financial hardship.
This circular ensures a member-centric approach, ensuring timely partial disbursement rather than outright denial, aligning with EPFO’s ongoing push towards improving service delivery and accountability.