For many employees, the Employees’ Provident Fund (EPF) is an essential part of their retirement savings plan. Apart from contributing to EPF, employees can also avail of an EPF advance to meet their immediate financial needs. In this comprehensive guide to EPF advance, we will explore the different types of EPF advance, eligibility criteria, application process, and other important details.
Types of EPF Advance
There are three types of EPF advance that employees can avail of. They are:
- EPF advance for medical treatment
If you or any of your family members require medical treatment, you can apply for an EPF advance to meet the expenses. The amount that you can withdraw depends on the treatment cost and your total EPF balance. You can withdraw up to six times your basic salary and dearness allowance or the total cost of treatment, whichever is lesser.
2. EPF advance for marriage
Employees can also avail of an EPF advance to meet the expenses related to their marriage or their children’s marriage. You can withdraw up to three times your basic salary and dearness allowance or the actual marriage expenses, whichever is less. Make sure to submit your marriage invitation card along with the EPF advance application.
3. EPF advance for buying or constructing a house
you plan to buy or construct a house, you can apply for an EPF advance or a salary loan. The amount you can withdraw depends on the purpose of the advance – buying a house, constructing a house, or both. You can withdraw up to 90% of the total EPF balance.
Eligibility Criteria for EPF Advance
To avail of an EPF advance, you need to meet the following eligibility criteria:
1. You should be an active EPF member for at least three years.
2. The maximum amount that can be withdrawn is a certain multiple of your basic salary and dearness allowance. Therefore, your salary should be sufficient to meet the eligibility criteria for EPF advance.
3. You should have sufficient funds in your EPF account to cater to the requested advance.
4. You can only avail of an EPF advance once in a year.
5. You should submit the required documents to prove your eligibility for the advance.
Application Process for EPF Advance
To apply for an EPF advance, follow these steps:
1. Log in to the EPF member portal using your Universal Account Number (UAN) and password.
2. Click on the ‘Online Services’ tab and select ‘Claim (Form-31, 19 & 10C)’ from the drop-down menu.
3. Check the ‘Proceed for Online Claim’ option.
4. Select the type of advance you require – medical, marriage or housing.
5. Fill in the details of your EPF account, the amount required, and your mobile number.
6. Upload the necessary documents such as the treatment bills, marriage invitation card, or house construction plan.
7. Submit the claim application online.
8. The employer will verify your claim details and approve it online.
9. Once the application is verified, the EPF advance amount will be credited to your bank account.
Documents Required for EPF Advance
To apply for an EPF advance, you need to submit the following documents:
1. UAN number
2. Aadhaar number
3. PAN number
4. Bank account number and IFSC code
5. A cancelled cheque
6. In the case of medical advance, the necessary medical bills and documents have to be attached as proof of treatment.
7. In the case of marriage advance, the marriage invitation card should be submitted.
8. In the case of the housing advance, a self-declaration form to confirm the purpose of the advance and documents related to the construction or purchase of the house should be submitted.
Repayment of EPF Advance
You need to note that an EPF advance is not a grant but treated as a loan that must be repaid. The advance amount will be recovered from your future EPF contributions. The advance repayment amount is deducted from your contribution to EPF every month until the entire advance is paid back. If you leave your job before repaying the EPF advance, the outstanding amount will be deducted from your final settlement. If you do not have sufficient funds in your EPF account to repay the advance, you will have to pay off the balance amount in cash.
Conclusion
EPF advance is an excellent financial safety net and helps employees meet their immediate and pressing financial needs. So if you are struggling with medical expenses, marriage expenses, or need financial assistance for acquiring your dream house, you can avail the EPF advance. However, it is always advisable to only use EPF advance when it is absolutely necessary since it needs to be repaid, and a significant portion of the future EPF contributions will be used to repay it. That said, the eligibility criteria and the application process are relatively simple, and with the proper documentation, you can receive the funds in your bank account within a reasonable time.