#FinancialBytes: Situations in which you can withdraw PF before retirement
Employees Provident Fund (EPF) is primarily a retirement benefit scheme by the Government of India for all salaried individuals in which employees get their accumulated funds after retirement or job-loss to finance their expenditures. However, the governing body i.e. EPFO allows funds withdrawal in certain special circumstances. Here, we list these special situations where EPF amounts can be withdrawn prior to retirement.
For marriage, and higher studies of children
If a person has been contributing to EPF scheme for more than 7 years, they can withdraw an amount up to 50% of the total accumulated funds for purpose of own marriage, or the marriage of a daughter, son, sister or brother. Funds can also be drawn in case one needs it for post-matriculation studies of their son or daughter.
For buying equipment for handicaps, and meeting lawsuit expenses
In case of differently-abled individuals, EPFO allows a non-refundable advance if they intend to buy assistive equipment. Additionally, if an employee has been sacked by an organization and he ultimately challenges such expulsion in a court of law, upto 50% EPF funds can be withdrawn to meet litigation expenses. 75% of EPF can also be withdrawn within a month of job loss.
For cases of company closure, and non-receipt of salaries
If a company has been locked/shut down for a period more than 15 days without employees receiving any compensation, EPF funds can be used. Similarly, if an employee has not been paid wages/salaries for a period of two months straight, funds can be taken out. Notably, however, the amount of withdrawal must not exceed the concerned employee's own contribution to the EPF plus interest.
For house-construction, and transfers to 'Varishtha Pension Bima Yojana.'
On the condition that an EPFO member has completed five years of contributing to the scheme, they can, if required, withdraw money for construction expenditure of a house, or for buying a site for a house. EPFO also allows members aged 55+ to transfer of funds upto 90% of their savings to the LIC of India for investment in 'Varishtha Pension Bima Yojana.'
For damage caused by natural calamities, and superannuation
If a person's property gets damaged due to natural calamities, an amount of upto Rs. 5,000 or 50% of the EPF-kitty, whichever is lower, can be drawn. One can also withdraw as much as 90% of the funds once the age of 54 has been attained, or within a period of a year before his actual retirement on superannuation, whichever is later.