EPFO rules change: Opposition claims salaried people being punished for government’s ‘mishandling of economy’

Leaders from several Opposition parties on Wednesday (October 15, 2025) targeted the Union government over the recent changes to the Employees’ Provident Fund Organisation (EPFO) rules, which now mandate a 25% minimum balance, and an increase in the time after which provident fund account holders can withdraw their money following unemployment.

Salaried class people were being punished for the Narendra Modi-led government’s “mishandling of the economy”, Manickam Tagore of the Congress party, and Saket Gokhale of the Trinamool Congress (TMC) said on social media, calling for the withdrawal of the provisions by Union Labour Minister Mansukh Mandaviya.

The Union government has refuted the Opposition leaders’ statement in a fact sheet, clarifying that the changes were brought in after extensive consultation with all stakeholders, including employees, employers, and state representatives who are part of the Central Board of Trustees, the apex decision-making body of the EPFO, which is headed by the Labour Minister. 

The decision to amend the scheme was taken by the Central Board of Trustees in a meeting held on Monday. Unemployed members of the EPFO will now be able to avail final settlement or full withdrawal of funds from the provident fund as well as pension accounts after 12 months and 36 months of unemployment, respectively. Presently, the scheme provides for the withdrawal of all funds from the provident fund as well as pension account after two months of continuous unemployment.

Mr. Tagore called the change in rules nothing short of “cruelty”. He argued the move would “finish” the lives of pensioners who depended on the Employees’ Provident Fund to survive. Mr. Gokhale called the changes “shocking and ridiculous”.

“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,” Mr. Tagore said on social media.

Mr. Gokhale also alleged that the Union government was making these changes because it was “expecting a drastic rise in unemployment due to its terrible economic policies”. “These new rules locking people’s EPF are the signs of a panicked govt trying to prevent a run on the EPFO. Salaried people are being punished for the Modi government’s mishandling of the economy,” he continued.

In its statement, the government called these remarks “blatantly false and a distortion of facts”, adding, “There is no rise in unemployment. As per net payroll data, over net 1.29 crore workers were added to payroll in 2024-25. The unemployment figures for 2023-24 were down to 3.2% as compared to 6% in 2017-18.”

“Earlier, on losing your job, you could withdraw your EPF balance after two 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,” Mr. Gokhale said.

“You can withdraw the pension component of your EPF ONLY after 36 months (i.e. 3 years) of unemployment. Earlier, you could do it after two months. And this is the worst part: Of your EPF balance, 25% cannot be withdrawn and will remain locked in for your entire career until you retire,” he said.

The government, in its fact sheet, said that these statements were “misleading” and a “misinterpretation of facts”. “The decision of the CBT enables a member to have a fine balance between liberal withdrawal options for various exigencies and personal needs by allowing the withdrawal of 75% of the funds without documentation and still leaving a decent corpus that will be available at the time of retirement,” it said.

The government further said that statements alleging workers can only withdraw “75% of their savings” were “incorrect”. “100% of the eligible balance (excluding the 25% minimum balance) can be withdrawn” by those who have finished at least 12 months of services under any of the “simplified provisions” any time during the year, the Central government said.