EPFO update: Now, EPF death claims can be processed without seeding Aadhaar

The Employees' Provident Fund Organisation (EPFO) has introduced concessions for handling physical claims of deceased claimants whose Aadhaar details are not linked to their accounts. This amendment, announced on May 17, 2024, updates the previous order from September 9, 2020, concerning claim settlements in the absence of the Universal Account Number (UAN) when an employee passes away.

“However, this concession is contingent upon obtaining approval from the Officer in Charge (OIC) via an e-office file. The file must meticulously document the verification procedures undertaken to authenticate the deceased's membership and the legitimacy of the claimants. This protocol is to be executed in conjunction with additional due diligence measures, as directed by the OIC, to mitigate the risk of fraudulent withdrawals," the retirement fund body said.

What is EPF?

The Employees' Provident Fund (EPF) is a retirement savings scheme where both employees and employers contribute equally on a monthly basis. A portion of these contributions goes into the mandatory Employee Pension Scheme (EPS), which is disbursed post-retirement. Partial withdrawals from the EPF are allowed for emergencies, while full withdrawal is possible upon retirement or after two months of unemployment.

Challenges faced by EPFO

EPFO's field offices encounter difficulties in updating or correcting Aadhaar details after a member's death. This hinders the processing of claims and causes delays in delivering benefits to the families of deceased members.

New concessions and requirements
 

To address these challenges, the EPFO has decided to process claims in such cases without the Aadhaar seeding requirement. This decision aims to provide easier access to EPF benefits for the families of deceased members. However, the following conditions must be met:

Approval from Officer in Charge (OIC): Each case requires approval through an e-office file.
 

Verification procedures: The file must thoroughly document the verification steps taken to confirm the deceased's membership and the legitimacy of the claimants.
 

Due diligence: Additional measures as directed by the OIC must be followed to prevent fraudulent withdrawals.

This relaxation applies when UAN details are correct but incomplete in the UID database.

EPFO specified that field offices must adhere strictly to the guidelines outlined in Paragraphs 6.9 and 6.10 of JD SOP version-2 dated 26.03.2024. This includes rectifying UAN data, seeding, and validating/authenticating Aadhaar as per the previous Circular dated 24.09.2020.

Issues raised

The EPFO highlighted several issues that have impeded claim processing:

Lack of Aadhaar information: For cases predating the implementation of Aadhaar.

Deactivated Aadhaar accounts: Difficulties in processing claims due to deactivated accounts.

Technical problems: Challenges in validating Aadhaar through the UIDAI database.

How can claims be processed

To address these issues, EPFO has outlined a process:
 

Temporary allowance for physical claims: Given to those without Aadhaar seeding in death cases.

Approval required: From the OIC via an e-office file.

Detailed verification: Necessary to confirm deceased membership and claimant authenticity.

Due diligence: Actions directed by the OIC to prevent fraudulent withdrawals.

Death of member without Aadhaar

As per the JD SOP version-2 dated March 26, 2024, “ In case of the death of a member without an Aadhaar, then the nominee’s Aadhaar will be saved in the system, and the nominee may be allowed to sign the JD form. Other processes will remain the same. There may be cases where the deceased member has not filed a nomination during his lifetime. In the absence of a valid nomination, one of the family members/legal heirs of the member may be allowed to allowed to attest the JD and submit his/her Aadhaar with the consent of other family members/legal heirs.”

Meanwhile, during 2023-24, the EPFO settled 44.5 million claims, including 28.4 million advance claims for fund withdrawal. In a bid to enhance "ease of living," the auto claim solution has been expanded to cover all claims under para 68K (education & marriage purpose) and 68B (housing purpose) of the EPF Scheme, 1952, as per a statement from the labour ministry.