Provident Fund: Hardships faced by the salaried: 35 million workers tapped provident fund accounts since April 2020
Nearly 7.2 million of those workers collectively availed of the non-refundable Covid advance that was allowed final 12 months amounting to Rs 18,500 crore between April 1, 2020, and May 12, 2021, information from the Employees’ Provident Fund Organisation (EPFO) confirmed. EPFO subscribers quantity about 60 million.
These 35 million workers collectively withdrew Rs 1.25 lakh crore from their provident fund accounts. The quantity consists of settlements in opposition to provident fund, pension, demise insurance coverage and even transfers. The complete claims settled by EPFO in FY19 stood at Rs 81,200 crore to 16.37 million subscribers. The information for FY20 just isn’t out there.
Indicates Job Losses(*35*)
While year-on-year withdrawals or claims are a minimum of 10% increased due to retirement exits and the switching of jobs, the quantity is way increased this 12 months due to extra Covid withdrawals, officers instructed ET. This additionally signifies workers could have misplaced jobs due to the pandemic and had been compelled to withdraw provident fund cash to satisfy bills.
The most claims had been from Mumbai, Pune, Delhi and Bengaluru. Apart from being industrial and providers hubs, these cities additionally had the highest variety of Covid instances.
The EPFO is paying these claims by auto settlement inside 72 hours of purposes being submitted to ease the monetary burden on subscribers.
The authorities had final 12 months allowed EPFO subscribers to withdraw the equal of 75% of their amassed funds or three months of primary pay — whichever was decrease — as a one-time non-refundable advance to satisfy monetary necessities throughout the pandemic.
“Average per capita withdrawals due to Covid hover around Rs 25,000, which means average monthly wage earnings (basic pay + dearness allowance) would be around Rs 8,000-9,000. In other words, it is the unskilled low-paid-wage workers who have taken advantage of withdrawals,” mentioned KR Shyam Sundar, professor at XLRI. “At the same time, to that extent their EPF accruals will stand less, and that is something worrying when we think about medium to long-term social security of the workers.”