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The Employees’ Provident Fund Organisation (EPFO) is planning to bring in automatic settlement for non-Covid claims. The plan, if implemented, would reduce the time taken to settle non-Covid claims which are currently processed manually. Claims related to the COVID-19 pandemic are already being settled automatically.
The EPFO is a social security organization for the salaried class run by the Government of India. It provides retirement benefits to employees in the organized sector by taking contributions from the employers and the employees. With the outbreak of the Coronavirus pandemic in the country last year, millions of employees have lost jobs and their personal savings have dried up.
Faced with a financial crunch, many people have started to use their retirement savings kept in Provident Fund (PF) accounts to tide over the crisis. According to data released by EPFO, 35 million out of the total 60 million EPFO subscribers have used money from their PF accounts between April 2020 and May 2021.
All COVID-19 related claims to the EPFO are largely being settled automatically within 72 hours of application. However, the non-Covid claims are currently being settled manually which is extremely time-consuming. Automation of non-Covid claims is being considered by the EPFO to ensure faster settlement of claims and ensure the safety of its workforce due to the threat of a potential third wave of COVID-19 infections.
One option is to increase the speed by automatically processing a claim if the KYC of the applicant matches with his/ her KYC record in the EPFO database. This system is currently under implementation for COVID-19 related claims only.
It may be recalled that the government had in 2020 allowed EPFO subscribers to withdraw 75% of the total fund or 3 months of basic salary, whichever comes out lower.