Reasons for delay or rejection of PF withdrawal claims under covid-19

With a view to provide support to those facing cash crunch in the wake of the ongoing covid-19 pandemic in the country, the government has allowed people to avail a non-refundable advance from their employee provident fund (PF). The employees are allowed to withdraw up to 75% of the outstanding balance in their PF account or three months basic plus dearness allowance, whichever is lower.

Many people have applied for this advance. As per the latest press release from the Employees’ Provident Fund Organisation (EPFO), it has so far settled 7.40 lakh covid-19 claims. The employees can apply for the advance under such claims online.

EPFO is currently working with one-third staff and is trying to settle the claims on priority basis. “The claims applied under covid-19 are being settled on fast track and settled within three working days," said a press release from EPFO.

However, many took to social media to complain about the delays in receiving the money or rejection of claims. "All the claims applied online go to the National Data Center of the EPFO and are getting processed from there. However, in case of any discrepancy, the claims are sent to the regional offices for clearing," said one of the EPFO field officers from the Gurugram office.

“Most of the delays or rejections are due to improper documents uploaded by the employees during the claim filing process," said the officer.

Following are some of the reasons leading to delay or claim rejection.

Unclear scan of cheque book or passbook: While filing a claim online, an employee has to upload the scanned copy of the cheque book, the first page of passbook or bank account statement, which should have the name of the applicant, bank account number and IFSC code of the applicant. This is done to ensure that the bank account details uploaded in the KYC or linked to the universal account number (UAN) of the employee is correct and no erroneous transfer of money happens. In case the scan is not clear, it is difficult to match the details with what is provided against the employee’s UAN. This can result in delay as EPFO will ask you to upload the scanned copy again. So, upload a clear scan of the document showing the bank account details.

Wrong bank account details: At times the details such as IFSC code of the bank or the account mentioned during the claim doesn’t match with what is seeded with the UAN. The reason could be the employer might have seeded the wrong details.

“There is also a possibility that the bank account linked with the UAN might have become dormant. Therefore, the person will have to get the bank details updated. The updation of bank account details can be done online," said Saraswathi Kasturirangan, Partner, Deloitte India.

At times an employee wants

the claim to come in a bank account different from the bank account mentioned against the UAN number. Therefore it needs to be changed.

However, any change made to the KYC details has to be approved by the employer. “Employers can approve the changes online using their digital signature, but at times the employers are not able to access their system due to the ongoing lockdown as the system may be lying at the office and hence will result in delay," said the field officer.

Insufficient balance: Employee should have made a contribution for at least three months to withdraw the money as the condition is 75% of the PF balance or three month’s basic plus dearness allowance whichever is lower.

Time taken by the bank: The EPFO processes the claim and issues the cheque to the bank generally within three days of applying the claim. Banks typically take additional one to three days to credit the money to the employee's account.

It's therefore important that your paperwork is in order and that your records match with what's seeded with your UAN for hassle free withdrawal.

Source - Live Mint