EPFO rules change: Opposition alleges salaried people being 'punished'; Govt fact-checks claims

New Delhi: The opposition on Wednesday slammed the Narendra Modi dispensation over the change in EPFO rules, alleging salaried people were being punished for the government's "mishandling of the economy" and urged Labour and Employment Minister Mansukh Mandaviya to scrap the "draconian" provisions.

The government, however, issued a point-by-point rebuttal of the opposition's charges through a fact-check and said the claims were "misleading".

In a post in Hindi on X, Mandaviya said EPF withdrawal is now even simpler and faster as 13 different categories and countless conditions associated with them have been simplified to create uniform provisions, allowing withdrawals to be made easily without any documentation process.

"Withdrawal Limits have been simplified -- whether it's the amount or frequency. Previously, withdrawals for marriage and housing were possible after five to seven years of service, but now they can be withdrawn after just one year. The limits for withdrawals for education and medical treatment have been made even more flexible," he said.

Additionally, in any special circumstances or emergencies, the full eligible amount can be withdrawn up to twice a year without any questions asked, Madaviya said.

The opposition had hit out at the government over the specific change to the period for availing premature final settlement of EPF from the existing two months to 12 months, and final pension withdrawal from two months to 36 months.

They also slammed the provision of earmarking 25 per cent of the contributions in the members' account as a minimum balance to be maintained by the member at all times.

In a post on X, Congress MP Manickam Tagore said the Modi government's new Employees' Provident Fund Organisation (EPFO) rules are nothing short of "cruelty".

"Pensioners and job-losers are being punished for needing their own savings. Prime Minister Narendra Modi ji — this is the time to intervene and stop Mansukh Mandaviya from destroying people's lives.

"Under the new EPFO decisions, you can withdraw PF only after 12 months of unemployment (earlier 2 months). Pension can be withdrawn only after 36 months (earlier 2 months). Twenty-five per cent of your own EPF will be locked forever!" he claimed.

Tagore said, "Who benefits from this, Mr Modi? Certainly not the workers. Imagine a worker who loses his job or a retiree waiting for years to access his hard-earned savings — while the Govt writes off lakhs of crores for its crony friends. This is not reform, this is robbery." He claimed Labour Minister Mandaviya's decisions will finish off the lives of pensioners who depend on EPF to survive.

"Prime Minister, please intervene immediately. Don't let bureaucratic cruelty destroy the dignity of India's working class," he said.

TMC MP Saket Gokhale said the new EPFO rules introduced by the Modi government are "shocking and ridiculous".

"It is open theft of salaried people's own money. Here's what the new rules say: Earlier, on losing your job, you could withdraw your EPF balance after 2 months of unemployment. That minimum period has now shockingly been increased to one year. Basically, for withdrawing your own money, you need to now be unemployed for a full year as opposed to only two months," Gokhale said.

"You can withdraw the pension component of your EPF ONLY after 36 months (i.e. three years) of unemployment. Earlier, you could do it after two months. And this is the worst part: Of your EPF balance, 25 per cent cannot be withdrawn and will remain locked in for your entire career until you retire," he said.

He urged Mandviya to scrap these new "draconian" EPF rules immediately.

A Press Information Bureau fact check said Gokhale's claims are "misleading" and gave a point-by-point clarification on these claims.

"Claim 1: Of your EPF balance, 25% cannot be withdrawn and will remain LOCKED IN for your entire career until you retire. Full withdrawal of the entire PF balance (including the minimum balance of 25%) is allowed under a few conditions, like retirement after attaining 55 years of service, permanent disability, retrenchment, voluntary retirement, or leaving India permanently, etc.," the fact check said.

Simplified provisions allow full withdrawal of the entire PF balance, including the minimum balance of 25 per cent, after 12 months of continuous unemployment, it said.

"Claim 2: EPF has been made mandatory, which means salaried persons cannot escape this draconian monthly robbery by the Govt of their own income. The EPF and MP Act 1952 was always mandatory for all establishments employing 20 persons or more, earning Wages less than or equal to Rs 15,000 per month," it said.

Rebutting the opposition's claim that there was a drastic rise in unemployment due to terrible economic policies, the fact-check said there is no rise in unemployment.

"As per the Periodic Labour Force Survey (PLFS) – Annual Report, the unemployment figures for 23-24 were down to 3.2% as compared to 6% in 17-18. As per net payroll data, over net 1.29 Cr workers were added to payroll in 2024-25," it said.

The EPFO maintains a nearly Rs 28 Lakh crore corpus and has earned the trust of crores of members due to its robustness, security, and higher returns, it added.