New EPF Scheme 2026: Easier PF withdrawals, earlier eligibility, but a new 25% lock-in

The biggest focus of the new rules is simplifying PF withdrawals. Earlier, different purposes had different conditions and service requirements, making the rules difficult for many members to understand. The new scheme brings most of these under a simpler framework while also ensuring that some money always remains in the PF account for retirement.

Here’s a look at what has changed.

From 13 withdrawal rules to just 3 broad categories

One of the biggest changes is that the government has merged several separate withdrawal provisions into three broad categories.

Instead of having different rules for medical treatment, marriage, education, home purchase, home loan repayment, house renovation, natural calamity and other situations, the new scheme groups withdrawals under essential needs such as illness, education and marriage; housing-related requirements; and special circumstances.

This makes the rules much easier to understand and reduces confusion over which provision applies in a particular situation.

Only one year of membership needed in most cases

Under the old EPF Scheme, different withdrawals required different lengths of service. In some cases, members had to complete five years or even seven years before becoming eligible.

The new scheme removes these different conditions.

It now states that members can become eligible for most partial withdrawals after completing 12 months of total membership of the Fund.

This means many employees will be able to access their PF savings much earlier than before.

You cannot empty your PF account anymore through partial withdrawals

Perhaps the most significant change is the introduction of a minimum balance requirement.

The new notification says: “Minimum Balance means an amount equivalent to twenty-five per cent of the aggregate of the total contributions made to the Fund to the credit of the member (inclusive of both the employee’s and the employer’s share and interest thereon)… which shall remain to the credit of the member after giving effect to any partial withdrawal.”

In simple words, if you make a partial PF withdrawal, at least 25% of your total PF savings must remain in your account.

This is a completely new concept introduced under the EPF Scheme, 2026.

Medical expenses

For medical treatment of the member or family, the new scheme allows withdrawal of up to 100% of the Eligible Member Balance after completing 12 months of membership.

Marriage and education

The rules have also become much simpler for marriage and education.

The notification says a member can withdraw: Up to 100% of the Eligible Member Balance for education after completing 12 months of membership. Such withdrawals can be made up to 10 times during membership.

Up to 100% of the Eligible Member Balance for marriage after completing 12 months of membership. These withdrawals can be made up to five times during membership.

Housing-related withdrawals also simplified

Instead of separate rules for buying a house, buying land, constructing a house, repaying a home loan or renovating an existing home, the new scheme combines all these under one housing category.

Members can withdraw up to 100% of the Eligible Member Balance after completing one year of membership. Such withdrawals can be made up to five times during membership.

Special circumstances

The scheme also creates a separate category for special circumstances.

Members can withdraw up to 100% of the Eligible Member Balance after completing 12 months of membership. However, such withdrawals can be made only twice in a financial year.

What is ‘Eligible Member Balance’?

The new notification introduces another new term called Eligible Member Balance.

It says: “Eligible Member Balance means the amount standing to the credit of the member in the Fund after deducting the Minimum Balance required to be maintained.”

This means the amount available for withdrawal is calculated only after leaving the mandatory 25% balance in the PF account.

Members leaving a job within one year also get relief

The scheme also provides some flexibility to employees who leave their jobs before completing one year of membership.

It says such members can still make a partial withdrawal, although the amount cannot exceed the Eligible Member Balance available on that date.

What has not changed?

-The rules for final settlement remain largely unchanged.

-Members can still withdraw their full PF balance in situations such as:

-Retirement after attaining 55 years of age

-Permanent and total disability

-Permanent migration abroad

-Retrenchment

-Voluntary retirement

-Other specified exit situations under the scheme

Why has the government introduced these changes?

The idea behind the new rules is to make PF withdrawals easier to understand while also protecting retirement savings.

Earlier, members had to deal with multiple withdrawal provisions, different service conditions and different limits depending on the purpose. The new scheme replaces this with a much simpler structure.

At the same time, by requiring members to retain at least 25% of their PF balance, the government wants to ensure that employees do not completely exhaust their retirement savings during their working years.

For over 8 crore EPFO members, the new scheme means simpler rules, earlier eligibility for most withdrawals and a more uniform withdrawal framework, while preserving a part of the PF corpus for retirement.

Disclaimer: This story is based on the notified Employees’ Provident Funds Scheme, 2026. Members should refer to the official notification or contact EPFO before making withdrawal decisions, as operational guidelines and claim procedures may be issued separately.

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