The Employees’ Provident Fund Organisation (EPFO) has reportedly terminated the Covid advance facility, which was a special fund withdrawal option for subscribers. This facility allowed EPFO members to withdraw part of their retirement savings as a Covid advance. The decision to discontinue this facility comes about seven months after the World Health Organization declared an end to the Covid-19 public health emergency.
Over three fiscal years starting from 2020-21, approximately 2.2 million EPFO subscribers availed of the Covid advance, totaling around Rs 48,075.75 crore. The distribution over the years was as follows: Rs 17,106.17 crore benefiting 69.2 lakh subscribers in 2020-21, Rs 19,126.29 crore aiding 91.6 lakh subscribers in 2021-22, and Rs 11,843.23 crore assisting 62 lakh subscribers in 2022-23. The EPFO had amended the rules of the EPF Scheme in 2020 to facilitate this non-refundable advance in the event of an epidemic or pandemic.
The termination of this facility is expected to impact consumption, as many used the Covid advance for discretionary purchases and other expenses. There is also a recent surge in COVID-19 cases in India, with Kerala having the highest number of cases.