EPS members can now withdraw money from the Employees Pension Scheme even if they have contributed for less than six months.
The Government of India has amended the Employees Pension Scheme (EPS) 1995, allowing members to withdraw benefits even if they contribute for less than six months.
The change in EPS 1995 will benefit 700,000 EPS members who leave the scheme early, having contributed for less than six months, contrary to the previous requirement.
The Ministry of Labor mentioned that many EPS 95 scheme members in the country leave the scheme early, despite the requirement of contributing continuously for 10 years to qualify for pension.
These members are allowed to withdraw funds as per the scheme rules. In the financial year 2023-24, 30 lakh claims for withdrawal benefits were settled.
Until now, the withdrawal benefit calculation depended on the years of service completed and the salary on which contributions were made to EPS.
Only members who contributed for six months or more were eligible for this benefit.
As a result, members who left the scheme after contributing for less than six months did not receive any withdrawal benefit, leading to the rejection of many claim applications.
According to the Ministry of Labor, in the financial year 2023-24, 7 lakh withdrawal claims were rejected because contributions to the EPS 95 scheme were made for less than 6 months.
However, following the government’s decision, all EPS members who have not reached 58 years of age by June 14, 2024, will now also be eligible to withdraw their money.
The central government has updated Table D. Now, the withdrawal benefit will be based on the duration of service and the amount contributed to EPS from the salary.
This change will rationalize the withdrawal benefits for members, benefiting over 23 lakh EPS members and ensuring they receive appropriate withdrawal benefits.
For instance, if a member contributes to EPS for 2 years and 5 months with a monthly salary of Rs 15,000, under the previous rule, they would receive a withdrawal benefit of Rs 29,850. With the recent rule amendment, the withdrawal benefit will now be Rs 36,000.
