Subscribers of the Employees’ Provident Fund Organisation (EPFO) dipped into their retirement savings and withdrew nearly Rs 46,000 crore during the Covid-19 pandemic under a special advance facility launched by the government.
According to data shared by the EPFO through a Right to Information filed by FE, over 25.8 million claims were received by it for Covid-19 advances between March 2020 and January 2023. Of this, about 21.1 million claims worth Rs 45,918 crore were settled during the period.
These advance claims accounted for over 16% of the over 130 million withdrawal claims received by the EPFO between fiscal 2019-20 and 2021-22.
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As part of relief efforts during the Covid-19 pandemic, the government had announced a provision for a special withdrawal from the EPF Scheme under the Pradhan Mantri Garib Kalyan scheme in March 2020. Under the facility enabled by an amendment in the Employees’ Provident Fund Scheme of 1952, members were eligible for an amount of advance not exceeding the basic wages and dearness allowances for three months or up to 75% of the amount standing to their credit in the EPF account. Being an advance, it also does not attract income tax deductions.
While withdrawals under the facility were at a record high in the fiscal 2021-22 when the pandemic was at its peak, leading to lockdowns and job losses, the data reveal that subscribers were withdrawing funds under the facility till as recently as January this year.
The EPFO received 240,000 claims under the facility in January 2023 and settled claims worth Rs 487.1 crore during the month. Overall, claims peaked in June 2021 when the EPFO received 1.5 million claims and settled claims amounting to Rs 3,125.42 crore in the month.
Claims remained high from July 2021 till October 2021 after the second wave of the pandemic and localised lockdowns led to higher healthcare spending, more job losses and salary cuts — with the EPFO receiving an average 1.19 million claims in these four months.
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The EPFO had allowed a second round of withdrawal under the Covid-19 advance in May 2021. “During the second wave of Covid-19 pandemic, ‘mucormycosis’ or black fungus has been declared an epidemic recently. In such trying times, EPFO endeavours to lend a helping hand to its members by meeting their financial needs,” the government had said at the time.
In fiscal 2021-22, the EPFO received 6.77 million claims under the first Covid-19 advance facility and disbursed Rs 11,090 crore. It also received 4.26 million claims that year under the second Covid-19 advance facility and disbursed another Rs 8,036.26 crore.
While the number of claims has gone down since then, they still haven’t entirely dwindled, with December 2022 reporting a fresh 600,000 claims under the advance facility.