Updated February 25th, 2024 at 14:45 IST

EPFO rejection rate hits 34% over 5 years, denying every third claim

The EPFO, with over 277 million accounts and assets totalling nearly Rs 20 lakh crore, received complaints about delays in claim settlements.

Reported by: Business Desk
EPFO | Image:Shutterstock
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EPFO rejection rate soars: EPFO's rejection rate for claims has surged from 13 per cent to 34 per cent over five years, with every third claim being rejected, according to recent media reports. The EPFO, touted as the world's largest social security organisation with over 277 million accounts and assets totalling nearly Rs 20 lakh crore, faced complaints from subscribers about delays in claim settlements on its official platform.

EPFO claim processing

Responding to these concerns, the EPFO stated that it typically takes 20 days to process and release a claim if all required documents are submitted correctly. However, out of the 73.87 lakh claims received for final PF settlement in the fiscal year 2022-23, 33.8 per cent (24.93 lakh) were rejected, while 46.66 lakh were settled, leaving 2.18 lakh pending.

This rejection rate marks a significant increase compared to previous years, rising from around 13 percent in 2017-18 to 34 per cent in 2022-23. The trend of rising rejections continued over the past five years, peaking at 35.2 per cent in 2021-22 before dropping slightly in the following fiscal year.

EPFO pressure challenges

EPFO officials have attributed this trend to the pressure they face, particularly due to the shift back to manual annual account updates and accountability for delays in claim settlements beyond the stipulated 20-day timeframe. The outdated IT system within the organisation has been identified as a major contributing factor to these challenges.

In a separate development, the Central Board of Trustees of EPFO announced an annual interest rate of 8.25 per cent for EPF accumulations in members' accounts for the financial year 2023-24. They also recommended distributing Rs 1,07,000 crore to EPF members' accounts, marking the highest total income recommended for distribution to date.

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Published February 25th, 2024 at 14:45 IST