Subscribers wait for EPF withdrawal as Covid-19 lockdown hits operations

For Karan Arora, the recent announcement that subscribers could withdraw part of their employee provident fund (EPF) to help tide over the Covid-19 crisis had sparked hope.

The Jaipur-based technical recruiter had been laid off 10 days earlier as his employer, a US staffing agency, struggled with business. He had made an application on March 24 and expected to receive the money swiftly in light of the new reforms.

However, the Employees’ Provident Fund Organisation (EPFO) asked him to wait, saying the nationwide lockdown had affected its own operations, including claim settlements.
 

The Union labour ministry on March 28 amended the EPF scheme to allow members to withdraw non-refundable advances — either their basic wages and dearness allowance for three months or up to 75 per cent of their total account, whichever is less — in the event of a pandemic.

With Covid-19 being an ongoing pandemic, these benefits currently extend to member employees across India, even those still in service. The retirement fund body had committed to fulfilling such requests within three days so that relief would promptly reach workers and their families in a time of need. The outbreak and lockdown have thrown up a number of challenges, such as layoffs, pay cuts and a general slowdown.
 

Many subscribers after their unsuccessful attempts to use the scheme have taken to social media to voice their complaints, as the EPFO website and grievance portal suffer outages and its customer helpline remains unreachable. In response to most such applicants, since April 3, the EPFO’s Twitter account has written: “Due to the lockdown and consequent movement restriction, the functioning of the office has been affected and claims settlement has also been affected.” E-mails from Business Standard seeking comment remained unanswered by the EPFO’s head office in Delhi and the Mumbai regional office.
 

One of the challenges experts had predicted in availing of this scheme was the requirement of KYC compliance, in the absence of which employees would have to request their workplaces to validate the claims. However, in recent cases, even those with the requisite KYC compliance have had their applications put on hold.
 

Arora has company in other disappointed EPF members. The day he was laid off was also the day Delhi-based Gaurav Sharma, sole earning member of his family, lost his father to a prolonged illness. As his bank balance ran low, Sharma says he made a claim on March 22, which has remained “under process” since. Where Arora has borrowed money from a friend to cover expenses, including rent, student loan EMIs, and household purchases, Sharma has been checking his bank account and frustratedly tweeting at the EPFO handle every day over the last week.
 

In Mumbai, marketing professional Divya Naik applied for withdrawal in February, during a phase of unemployment. Her claim was approved mid-March but no payment has been forthcoming. Her complaints have been closed without resolution, too, citing the lockdown. “What is the point if we cannot access our hard-earned money now,” says Naik, who has since found a new job. “Fortunately, I am not in urgent need of funds anymore but there are others who cannot afford to wait.”