India’s social security coverage: EPFO expansion and reforms

Background: why social security matters

Social security protects workers and families against loss of income and other contingencies at different life stages. It also builds financial security in retirement. As informal, gig and platform work expands, income and job continuity vary more, so the need for such protection grows.

The Employees' Provident Fund Organisation (EPFO) is a statutory body under the Ministry of Labour and Employment. It runs provident fund, pension and insurance schemes for eligible workers. The new schemes of 2026 are introduced under the Code on Social Security, 2020.

Key figures:

The member count is as on 16 September 2026, and the establishment and pensioner figures are as of September 2026.

Why does this matter?

• Wider cover: coverage reaching 68.4 percent shows the base of protected workers has grown sharply since 2015.
• Wage ceiling: raising the ceiling to Rs 25,000 is expected to bring more than 51 lakh additional employees under mandatory cover.
• Informal workers: e-Shram, PM-SYM and the Pradhan Mantri Samajik Sahayata Yojana support unorganised workers and vulnerable groups.
• Ease of use: simpler withdrawals and auto-settlement cut paperwork for members.

Reforms in withdrawals and compliance

• Partial withdrawal rules: 13 provisions were merged into three categories, namely essential needs, housing needs and special circumstances.
• Separate limits: 10 withdrawals for education and 5 for marriage, where earlier both shared a combined limit of 3.
• Balance and service: the framework introduced in October 2025 allows withdrawal of up to 75 percent of the PF balance, with a minimum service requirement of 12 months.
• Auto-settlement: the limit for eligible advance claims was raised to Rs 5 lakh.
• Bank verification: cheque-leaf image or attested passbook upload is no longer needed for eligible online claims.
• Compliance schemes: Vishwas 2026 offers one-time settlement of eligible disputes over damages or penalties, and Amnesty 2026 helps establishments regularise their PF trusts.

1. Member contributes ↓
2. Employer contributes ↓
3. EPFO invests and pays interest ↓
4. Member withdraws or claims ↓
5. Pension or insurance on retirement or death

Issues and challenges

• Formal-informal gap: EPFO covers formal employment, so gig and informal workers rely on separate schemes.
• Eligibility rules: partial withdrawals remain subject to prescribed conditions.
• Compliance burden: employers face damages and penalties for defaults, which the one-time settlement schemes try to ease.
• Awareness: digital claims need workers who know how to use online portals.

Way forward

• Extend the Code on Social Security, 2020 framework to gig and platform workers.
• Keep improving digital settlement so claims are paid without manual steps.
• Use e-Shram data to link unorganised workers to schemes.
• Encourage voluntary compliance through the settlement schemes and the employer portal.

Value-addition points for Mains

• Coverage rose from 19 percent in 2015 to 68.4 percent in 2026, over one billion people (PIB backgrounder).
• Mandatory wage ceiling moves from Rs 15,000 to Rs 25,000, bringing over 51 lakh more employees in.
• EDLI 2026 gives insurance up to Rs 7 lakh without a separate premium.

Use these points in an essay on welfare and labour to show reform of both coverage and delivery.