One can apply for non-refundable advances from the Employees’ Provident Fund or EPF for a variety of reasons. These include financing a member’s life insurance policies, buying a house/flat or a plot of land, repayment of housing loan, bearing medical expenditure, picking up wedding expenditure, purchase of equipment of differently abled family members etc.
Financing life insurance policies
If an EPS subscriber thinks that the premium of his life insurance policy should be funded from his/her EPF account, he/she can apply for it. The policy should be assigned to the EPF and there should be adequate fund in the account.
Purchase of dwelling unit/plot of land
A subscriber must be a member for at least 5 years to be eligible for it. An amount of 24 months of wages + DA or total balance in the account, whichever is less will be admissible for payment. After 5 years another part withdrawal of 12 months’ wages + DA. After 10 years from the original sanction, another part withdrawal equal to 12 months’ wages + DA can be admitted.
Repayment of housing loan
Only those who have completed 10 years as members of EPF can apply for such advances. The loans should have been taken from notified agencies. A maximum amount of salary + DA for 36 months (employee + employer) or total outstanding loan and interest, whichever is lower can be applied for.
If the company closes down
In that unfortunate situation, if the employee has not got any compensation or has not got salary for 2 months or more, he/she can withdraw up to 100% of own contribution. If the employee remains unemployed for more than one month, advances can be taken.
Buying equipment for differently abled family members
An employee can take advances worth basic salary + DA for 6 months or cost of equipment, whichever is less.
Wedding of self/children, brother/sister
One has to be a member for at least 7 years for this benefit. Maximum amount of 50% of the employee’s share can be taken.
Investment in Varishta Pension Bima Yojana
A maximum amount of 90% of the total PF balance can be taken but only if the applicant is more than 55 years old.
The Employees’ Provident Fund was legislated to create a social safety net for retiring employees. It offers other benefits apart from a retirement corpus and monthly pension. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
