EPS members can now withdraw money even if they have contributed for less than six months to the Employees Pension Scheme (EPS).
The Government of India has changed the EPS 1995 rules to allow this. Previously, members needed to contribute for at least six months to get any withdrawal benefits.
This change will help around 7 lakh members who leave the scheme early, allowing them to still withdraw their money.
Benefits for Short-Term Contributors
The Ministry of Labor noted that many members leave the scheme before completing the required 10 years of continuous contribution needed for a pension.
These members are now eligible to withdraw their money under the new rules. In the financial year 2023-24, 30 lakh withdrawal benefit claims were settled.
Before this amendment, withdrawal benefits were based on the number of years worked and the salary on which the EPS contributions were made.
Only members who contributed for at least six months could claim this benefit, leading to many rejections for those who contributed for less time.
Impact of the New Amendment
In 2023-24, about 7 lakh withdrawal claims were rejected because the contributions were made for less than six months.
With the new rule, all EPS members who have not reached 58 years of age by June 14, 2024, can withdraw their money.
Additionally, the government has updated Table D, so withdrawal benefits will now depend on the exact months of service and the salary contributions made. This adjustment aims to make the withdrawal process fairer for all members.
For example, a member who contributed for 2 years and 5 months with a monthly salary of Rs 15,000 would have received Rs 29,850 under the old rules.
With the new rules, they will now receive Rs 36,000. This change will benefit over 23 lakh EPS members by ensuring they get a proper withdrawal benefit.
