The Employees' Provident Fund Organisation (EPFO) has approved a comprehensive withdrawal reform as part of the wider EPFO 3.0 upgrade, with the Ministry of Labour and Employment clearing the changes. According to Business Today, this overhaul represents a fundamental change in how more than 30 crore workers access their retirement savings. The reform allows members to withdraw provident fund money through UPI apps and bank ATMs, without waiting for employer approval. The ATM and UPI route is expected to go live by the end of May 2026, with the full rollout targeted for mid-2026.
The reform introduces a simplified structure with 13 old withdrawal provisions collapsing into three simpler categories. As reported by Business Today, the new system features an 'Essential Needs' bucket covering illness, education, and marriage as the primary category. Unemployed members can now take 75% of their balance immediately, while 25% stays invested - a significant improvement from previous restrictions. The reform eliminates the need for employer sign-off, streamlining the withdrawal process for members.
A Social Security Agreement (SSA) is a bilateral agreement between India and another country to ensure continued social security coverage of workers posted in another country. According to reports from Mint, this reciprocal arrangement generally provides for avoidance of double coverage and covers three key provisions: detachment, exportability of pension, and totalisation of benefits. The agreements also ensure equality of treatment to international workers from SSA countries with host country workers.
As reported by Mint, India has signed 20 SSAs out of which 19 have been made effective. The agreements cover various countries including Belgium (effective from September 1, 2009), Germany (October 1, 2009), Switzerland (January 29, 2011), Denmark (May 1, 2011), Luxembourg (June 1, 2011), France (July 1, 2011), South Korea (November 1, 2011), Netherlands (December 1, 2011), Hungary (April 1, 2013), Finland (August 1, 2014), Sweden (August 1, 2014), Czech Republic (September 1, 2014), Norway (January 1, 2015), Austria (July 1, 2015), Canada (August 1, 2015), Australia (January 1, 2016), Japan (October 1, 2016), Quebec (April 1, 2017), and Portugal (May 8, 2017). The Brazil agreement is yet to enter into force.
According to Mint, the EPF offers 8.25% interest this quarter on joint monthly contributions made by employers and employees. Members are eligible to open an account if their basic salary and dearness allowance is up to ₹15,000 per month, with provision for voluntary provident fund (VPF) option if the components exceed ₹15,000/month. Subscribers receive the lump sum corpus at retirement, with accumulated employee contribution of up to ₹2.5 lakh being tax-free and the full employer contribution being tax-free. During the scheme tenure, annual contributions of up to ₹1.5 lakh by the employee are exempt under Section 80C of the old tax regime, while employers' contribution below ₹7.5 lakh is exempt under both old and new tax regimes.
As reported by Mint, each and every worker from a country not having either SSA or bilateral comprehensive economic agreement with India has to contribute mandatorily. IWs drawing salary in any currency are to be covered as IWs, with contributions computed in Rupees using the telegraphic transfer buying rate offered by State Bank of India for the respective currency. Foreigners employed directly by Indian establishments are coverable if the establishment is covered under the EPF and MP Act, 1952. The Certificate of Coverage (COC) is issued by regional PF Commissioners for Indian workers being deputed to SSA countries, and all foreign nationals including OCI/PIO card holders are required to enroll and comply with EPFO as IWs.
According to Mint, the full amount standing to the credit of a member's account is payable when persons covered by SSA cease to be employees in establishments covered under the Act. For persons not covered by SSA, withdrawal benefits are available on retirement after 58 years of age or permanent incapacity for work. Only IWs covered by SSA are eligible for withdrawal benefit under EPS, 1995 provided they have not rendered eligible service of 10 years even after including totalisation benefits. The Certificate of Coverage procedure requires filling online application forms available on International Workers Portal, approval by employer using e-sign, and submission to the EPFO office under whose jurisdiction the establishment is registered.
