I just found out that under the new EPFO 2025 rules, I can’t withdraw my full EPF amount even after leaving my job. It says 25% of the balance will stay locked until retirement, and the final settlement is allowed only after 12 months of unemployment.
Can someone please explain why EPFO changed this rule? What’s the logic behind keeping 25% locked? Also, is there any way to withdraw funds earlier in case of an emergency?
Yes, this has been a big change under the EPFO rules 2025. Here’s what you need to know:
- 25% of your EPF balance stays locked: EPFO now requires that 25% of your EPF contributions remain in the account until retirement. This is to ensure everyone has some retirement savings.
- Full withdrawal waiting period increased: Earlier, you could settle your EPF account 2 months after leaving a job. Now, you need to wait 12 months of unemployment to withdraw the eligible amount.
- Why this change? EPFO says it’s to protect your retirement corpus. Many people withdraw everything early and end up with very little at retirement. Locking a portion ensures some long-term security.
- Can you withdraw earlier? Only partial withdrawals for emergencies are allowed — such as medical needs, education, or housing and these follow separate limits. There’s no way to bypass the 12-month waiting period for full withdrawal.
Tip: If you urgently need money, you can explore partial withdrawal options for emergencies under EPFO guidelines.