Millions of withdrawal claims — both Covid-related and non-Covid — have been pouring in since the outbreak of the Covid-19 pandemic last year, as EFPO subscribers dug into their retirement savings to meet their financial requirements.
Though the Covid-related claims are largely being settled automatically, the non-Covid claims have to be settled manually. Typically, all Covid-related claims are settled within 72 working hours.
“As an organisation, we have to be prepared for the third wave,” a top EPFO official told ET. The official said several proposals, including automation, are being considered in view of the safety of the workforce.
“One option is to process all claims automatically if the KYCs of the applicant match the EPFO database, as is being done with the Covid claims,” he said, adding that this would hasten the process of settling normal claims, which sometimes take more than a month.
Some 35 million workers in the formal sector, or more than half of the 60 million EPFO subscribers, have dipped into their retirement savings between April 1, 2020 and May 12 this year to meet their financial needs, causing an outflow of more than ₹1.25 lakh crore.
Of this, nearly 7.2 million subscribers have availed of the non-refundable Covid advance amounting to ₹18,500 crore. Last year, the government had allowed EPFO subscribers to avail 75% of their fund amount, or three months’ basic pay, whichever is lower, as a one-time, non-refundable advance to address their financial requirement during the pandemic.
Recently, EPFO had notified the benefit of a second withdrawal as well, adding to pressure on its workforce.