EPFO Increases Auto-Settlement Limit to ₹5 Lakh: Quick Withdrawal Without Manual Verification

Big Relief for Employees: EPFO Raises Auto-Settlement Limit to ₹5 Lakh, No Manual Verification Needed

The Employees’ Provident Fund Organisation (EPFO) has provided major relief to millions of salaried employees by increasing the auto-settlement limit for advance claims from ₹1 lakh to ₹5 lakh. This means members can now withdraw up to ₹5 lakh within 3 days without requiring manual verification.

This move is expected to speed up emergency withdrawals, especially in cases related to medical treatment, home purchase, marriage, or education.

Why was this change needed?

Previously, if an EPFO member wanted to withdraw more than ₹1 lakh as an advance, they had to go through a manual verification process, which involved visiting the EPFO office, submitting documents, and waiting for approval—often causing delays.

Now, with the new limit, members can access higher amounts more quickly, reducing hassle and supporting urgent financial needs.

What is Auto-Settlement?

The auto-settlement system was introduced during the COVID-19 pandemic to provide immediate relief to those facing financial crises. Under this process, eligible claims are processed electronically within 3 working days, without any manual checks.

In March 2025, the EPFO's Executive Committee approved a proposal to raise the auto-settlement cap to ₹5 lakh, which has now been officially implemented.

How many claims are settled automatically?

According to the Labour Ministry, 76.52 lakh advance claims have already been settled via the auto mode in the first 2.5 months of FY 2025–26. This accounts for 70% of all advance claims during this period, showing how widely the feature is being used and appreciated.

Key Benefits of This Decision

✅ Faster access to funds—up to ₹5 lakh in just 3 days
✅ No manual verification required
✅ Useful for medical, educational, housing, or marriage needs
✅ Reduces load on EPFO offices and improves efficiency
✅ Enhances transparency through digital processing

Steady Growth in EPFO Membership

As per data from the Labour Ministry, EPFO added 19.14 lakh new members in April 2025 alone. This marks a 31.31% increase over March 2025 and a 1.17% year-on-year growth compared to April 2024.

These numbers highlight the growing trust in EPFO’s digital services and the need for more user-friendly financial systems.

What to Keep in Mind

• Ensure your UAN (Universal Account Number) is KYC-compliant

• Your bank account must be linked with your EPF account

• Use the EPFO portal or UMANG app to submit advance withdrawal claims

• Claims under auto-settlement are processed electronically without human intervention

Conclusion:
EPFO’s move to raise the auto-settlement limit to ₹5 lakh is a major upgrade in its services. It empowers members to access larger funds faster, without the red tape of manual checks. This decision aligns with the government’s Digital India mission and marks a significant step toward a more efficient, employee-friendly provident fund system.