Labour Ministry Initiates Return of Unclaimed EPFO Funds to Millions of Subscribers
In a significant move to benefit millions of account holders, the Labour Ministry has officially begun the process of returning unclaimed funds lying dormant in inoperative Employees’ Provident Fund Organisation (EPFO) accounts. Labour Minister Mansukh Mandaviya announced that this initiative is expected to positively impact over 3.1 million subscribers across the country.
Pilot Phase to Cover 0.7 Million Accounts
A pilot phase covering approximately 0.7 million subscribers will be rolled out shortly, following a decision taken during a weekly review meeting chaired by Minister Mandaviya. This initial phase targets accounts where Aadhaar-linked bank details are already available with EPFO, enabling the retirement fund body to directly credit the pending amounts to subscribers without requiring additional claims.
Currently, EPFO maintains around 31.86 lakh inoperative accounts holding deposits worth a staggering Rs 10,903 crore. Among these, nearly 7.11 lakh accounts contain unclaimed balances of up to Rs 1,000 each, totalling Rs 30.52 crore. Many of these accounts are as old as 20 years and have recorded no transactions for the past three years, leading to their classification as inoperative under existing regulations.
Addressing the Buildup of Small Balances
Under the provisions of the EPF & MP Act, beneficiaries are typically required to file formal claims to withdraw their provident fund savings. However, authorities have observed that in numerous cases, the balance amount is too small relative to the documentation required, resulting in a gradual accumulation of unclaimed deposits over time. This new initiative aims to streamline the process and ensure that even minor amounts are rightfully returned to their owners.
Strengthening Scholarship Scheme for Unorganised Workers' Children
Alongside the payout initiative for unclaimed EPFO funds, the Labour Ministry has also announced enhancements to its education assistance programme for children of unorganised workers. The revised scheme will now include a merit-based scholarship of up to Rs 25,000 in addition to the existing welfare-based support.
"In order to enhance equity, remove unintended exclusions and ensure policy clarity, the ministry is amending the scheme guidelines to allow a student who is availing the ministry’s welfare-based scholarship to also receive a merit-based scholarship from any central or state government agency, wherever eligible," the Labour Ministry stated in an official release.
This year, about 0.16 million students have received welfare-based financial assistance amounting to Rs 77.9 crore, a significant increase compared to 92,118 beneficiaries who received Rs 31.65 crore in the 2024-25 period. The initiative aligns with the Code on Social Security, 2020, which seeks to expand social security and welfare measures, including education support, for unorganised workers and their families.
The combined efforts of returning unclaimed EPFO funds and strengthening educational scholarships underscore the government's commitment to improving financial security and social welfare for workers across various sectors.
