EPFO's big decision, balance up to Rs 1000 auto-refund

There's news of significant relief for millions of EPFO ​​members. 

The Ministry of Labor and Employment is preparing to settle 7.11 lakh inoperative EPF accounts. Accounts with a balance of ₹1,000 or less will now have the funds transferred directly to the account holders' bank accounts without any application.

According to the report, approximately ₹30.52 crore has been lying unclaimed in these small and inactive accounts for a long time. 

This amount will be automatically transferred to Aadhaar-linked bank accounts. This will require no form filling or visits to the EPFO ​​office.

What is the new decision?

The Ministry of Labor has decided to settle 7.11 lakh closed accounts with a balance of ₹1,000 or less. If the account holder is deceased, the amount will be given to their nominee or legal heir.

What is an inoperative EPF account?

When an employee's account doesn't receive any contributions from the employer for 36 months, that account is considered inoperative. Often, these accounts with low balances are left unused due to job changes, retirement, or simply lack of knowledge.

Preparing for a major overhaul

Not just small accounts, but a total of 31.86 lakh closed accounts hold approximately ₹10,903 crore. Currently, the campaign is starting with small accounts, but the remaining accounts will also be reviewed in a phased manner.

What will change with EPFO ​​3.0?

EPFO 3.0 is set to be implemented from the next financial year. Under this initiative, services will be fully digitalized and accelerated through the Core Banking System (CBS). 

It is claimed that in the future, claim settlement time could be reduced from 20 days to less than three days. The government's clear objective is to reduce paperwork, increase transparency, and facilitate member services.