Executive Summary:
This document addresses questions regarding EPFO claim rejections and process improvements. It details the rationale behind self-declaration for partial withdrawals, the reduction in claim rejections due to document quality, and measures to prevent misuse. The document also outlines digitization efforts and claim settlement timelines, effective as of July 28, 2025, for the Lok Sabha.
Key Points / Main Content:
Self-Declaration and Authenticity:
* The Composite Claim Form, introduced in 2017, allows self-certification for partial/final withdrawals, eliminating the need for supporting documents.
Claim Rejections and Document Quality:
* Removal of mandatory cheque leaf/passbook image uploads on April 3, 2025, significantly reduced claim rejections due to poor document quality.
* Claim rejections due to poor quality document uploads decreased from 27,66,328 in 2024-25 to 3,29,084 in 2025-26.
* Over 1.9 Crore members have benefited from the simplified process since 22.07.2025.
Fraud Prevention:
* Claims are processed only after member account activation via Aadhaar OTP or Face Authentication.
* Payments are directly deposited into verified bank accounts.
* Concurrent, internal, and statutory audits are conducted to monitor process violations.
Addressing Unexplained Claim Rejections:
* Process simplification aims to increase auto-settlement of advance claims.
* The number of rejection reasons has been reduced from 44 to 18, with a remarks column for additional explanations.
Digitization of Joint Declaration:
* Members with Aadhaar-verified UAN can update profile details online without employer/EPFO approval.
* This facilitates self-correction of profile data, leading to easier claim settlement.
Claim Settlement Timelines:
* Auto-settlement limit for illness claims was increased from ₹50,000 to ₹1 Lakh in April 2024.
* Advances/withdrawals for housing and marriage are now included under auto-settlement.
* The limit for auto-settlement of such advances/withdrawals has increased from ₹1 Lakh to ₹5 Lakh.
* Claims under auto-settlement are processed within 3 days.
Impact Analysis:
Members:
* Impact: Benefit from simplified claim processes, reduced rejections, faster settlements, and increased self-service options for profile updates.
* Action Required: Ensure Aadhaar verification of UAN, utilize self-service options for profile updates, and be aware of revised claim settlement processes.
EPFO:
* Impact: Streamlined claim processing, reduced administrative burden, and enhanced fraud prevention through digital verification and audit mechanisms.
* Action Required: Implement and monitor revised claim processes, maintain digital infrastructure for self-service options, and conduct regular audits.
Employers:
* Impact: Reduced involvement in profile updates, as members can self-correct data.
* Action Required: No direct action required, but should be aware of the changes to inform employees.
Key Entities Referenced
Employees' Provident Fund Organisation (EPFO): A statutory body under the Ministry of Labour and Employment, responsible for managing provident fund schemes in India.
LOK SABHA: The lower house of the Parliament of India.
SHRI VIJAYAKUMAR ALIAS VIJAY VASANTH: A Member of Parliament who raised a question regarding EPFO claim rejections.
SHRI MANICKAM TAGORE B: A Member of Parliament who raised a question regarding EPFO claim rejections.
SHRI SURESH KUMAR SHETKAR: A Member of Parliament who raised a question regarding EPFO claim rejections.
SUSHRI SHOBHA KARANDLAJE: Minister of State for Labour and Employment who provided the answer to the parliamentary question.
Aadhaar: A 12-digit unique identity number issued to all Indian residents.
Universal Account Number (UAN): A unique number assigned to each employee contributing to the Employees' Provident Fund, linking multiple member IDs.
GOVERNMENT OF INDIA
MINISTRY OF LABOUR AND EMPLOYMENT
LOK SABHA
UNSTARRED QUESTION NO. 1305
TO BE ANSWERED ON 28.07.2025
EPFO CLAIM REJECTIONS
1305. SHRI VIJAYAKUMAR ALIAS VIJAY VASANTH:
SHRI MANICKAM TAGORE B:
SHRI SURESH KUMAR SHETKAR:
Will the Minister of LABOUR AND EMPLOYMENT be pleased to
state:
(a)the details of the rationale behind the EPFO's decision to allow
employees to self-declare reasons for partial withdrawals from their
provident fund accounts, and the manner in which the impact the
authenticity of claims;
(b)the details of the number of claim rejections due to poor-quality
document uploads before and after the introduction of the new claim
settlement process in the form of Statistics;
(c)the manner in which the EPFO ensure that the new system of self-
declaration for provident fund withdrawals does not lead to misuse or
fraudulent claims;
(d)the details of the measures that have been taken by the EPFO to
address the issue of claim rejections without clear explanations as
highlighted by the EPFO grievance cell;
(e)the details of the process of digitizing the joint declaration process
for updating member details, and the manner in which this impacted
the efficiency of claim settlements; and
(f)the details of claim settlement timelines to achieve its target of 100
per cent claim resolution in the near future?
ANSWER
MINISTER OF STATE FOR LABOUR AND EMPLOYMENT
(SUSHRI SHOBHA KARANDLAJE)
(a): The Composite Claim Form introduced in 2017 aims to
rationalize the process of claiming advances/partial & final
withdrawals by relying on ‘self-certification’ for this purpose reposing
trust in the member. Accordingly, no document substantiating the
claim is required to be submitted to the EPFO offices.
Contd..2/-:: 2 ::
(b): In the new simplified settlement process the requirement of
uploading the image of the cheque leaf/pass book was removed on
03.04.2025. The claims rejected due to poor quality document
uploads for ensuring KYC/identity with regard to bank account has
significantly reduced as tabulated below:-
Year Total No.
2024-25 27,66,328
2025-26 3,29,084
Over 1.9 Crore members have benefited from the simplified process
since 22.07.2025.
(c): All claims are filed only after member account is activated using
Aadhaar OTP or Face Authentication. All payments pursuant to claim
settlement are sent to bank accounts directly verified with the
concerned bank to ensure credit to member account only. A system
of Concurrent Audit is being undertaken followed by Internal Audit as
well as Statutory Audit to monitor any process violation.
(d): Process simplification has been done to increase auto-
settlement of advance claims. The reasons for claim return/rejections
have been rationalized reducing the existing 44 reasons to 18
reasons. A remarks column to facilitate entering of description of any
other reason has also been provided
(e): Under the revised procedure, the members whose Universal
Account Number (UAN) has already been validated through Aadhaar
can update their profile online like name, date of birth, gender,
father/mother’s name, marital status, spouse name etc. without any
approval from employer or EPFO. This has resulted in facilitating the
member to carry out self -corrections and removing errors in profile
data which leads to easier claim settlement.
(f): The auto settlement of claims processing limit under Paragraph
68J (Illness) of the EPF Scheme was enhanced from ₹50,000/- to ₹1
Lakh in April 2024. Subsequently, advances/withdrawals for Housing
and Marriage have also been included under the auto-settlement of
claim facility and the limit all such advances/withdrawals has been
increased from ₹1 lakh to ₹5 lakh with a view to facilitate more
members availing speedy settlements. Claims under auto settlement
process are settled within 3 days of receipt.
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