Will automatic payout of inoperative EPF accounts be allowed above ₹1,000? Here’s what Govt said

Yes. The Government has said that the auto-initiation facility will likely be extended to amounts above ₹1,000, but only after the pilot project succeeds.

"In the first phase, around 1.33 lakh such accounts, amounting to nearly ₹5.68 crore will be covered under this reform initiative. The amounts will be directly credited to members’ Aadhaar-seeded and EPFO-linked bank accounts without requiring fresh claims or documentation, significantly simplifying the process and helping members receive their dues faster. Based on the success of the pilot, the facility will be extended in subsequent phases to accounts with balances above ₹1,000, further strengthening member-centric reforms in EPFO, said the Ministry of Labour & Employment.

What the Government announced

The Employees’ Provident Fund Organisation (EPFO) board approved a pilot project to automatically settle inoperative EPF accounts with balances of ₹1,000 or less. The money will be directly credited to the member’s Aadhaar-linked bank account, without requiring any claim or paperwork.

Around 1.33 lakh accounts with about ₹5.68 crore will be covered in the first phase.

These are accounts where no contribution or activity has occurred for several years.

Liquidation of inoperative EPF accounts

"This initiative will facilitate faster credit of long-pending balances to members, reduce procedural delays, improve data accuracy, and further enhance ease of access and service delivery for EPFO members," the Labour Ministry said.

As per EPFO’s Standard Operating Procedure (SOP) dated 2 August 2024, any EPF account that has not recorded any credit or debit for 36 months or more is classified as inoperative. Such accounts are automatically blocked to prevent unauthorised withdrawals.

EPFO fixes 8.25 pc interest rate on EPF deposits for 2025-26

Retirement fund body EPFO, for the third year in a row, fixed the interest rate on employees' provident fund deposits at 8.25 per cent for 2025-26, a labour ministry statement said on Monday.

The Central Board of Trustees, in its meeting chaired by Union Minister for Labour & Employment Mansukh Mandaviya on Monday, recommended an 8.25 per cent annual rate of interest to be credited on EPF accumulations in members’ accounts for the financial year 2025-26, the ministry said.