Can I Rely on My Provident Fund to Undergo Medical Treatment?

Last Updated : June 30, 2021, 1:41 p.m.

The saying ‘Health is Wealth’ holds true and there’s no need to explain it. But what matters is whether you have the wealth to undergo medical treatment in case you fall sick. In the absence of hard cash, there’s always an option for you to take a loan and get yourself treated. The good thing is that you don’t have only one loan option, but there are quite a few for you to choose from. While there are bank loans in the form of a personal loan, you can also take a loan against your Employees’ Provident Fund (EPF). What’s special with the loan against EPF that you don’t find in others? Well, you don’t need to return and there’s no interest on a loan against the provident fund. But what is the criteria and process to get this loan? Let’s find out in this post.

Let’s Start with a Brief on EPF

The in-hand salary you receive comes after your employer deducts a certain portion, and the same goes into your EPF account. The deduction is made twice – one is your contribution and the other one is an employer contribution. A 12% of your basic salary and dearness allowance is deducted by the employer twice and gets deposited in your PF account. Contributions of both employer and employee earn you the interest.

How Much Can You Withdraw from Your PF Account?

The provident fund rules say that you can withdraw from your EPF account to the tune of 6 months’ basic salary and dearness allowance or employee share with interest, whichever is lower. Can you withdraw for your treatment only or for your family members too? Let’s be told that you can do it for both. However, the loan against EPF is not permitted for all kinds of illness, it is available for some cases. You can thus ask your company officials about the illness for which the retirement body Employees’ Provident Fund Organisation (EPFO) grants an advance.

What is the Process by Which You Can Get EPF Funds for Medical Treatment?

You need to fill Form 31 and submit the same along with a certificate C signed by employer and Doctor. Now the question arises, how can you access Form 31? The form lies on the website of the EPFO . All you need is login to your EPF account and find the form. The login is made with a Universal Account Number (UAN) and Password. UAN remains the same irrespective of the job switch you make. With the job change, provident fund contributions will go into a new EPF account. All your accounts will be linked to UAN. In case you don’t know your UAN, you can either call your employer or go online and click on ‘Know Your UAN’ to get the same.

How Much Shall You Withdraw from Your Provident Fund?

This is pretty subjective in nature and the answer can vary depending on situation to situation. Firstly, you need to check the treatment expenses. After that, there’s a need to look at your contribution to the EPF and the interest on the same. Plus, check how much the basic salary and dearness allowance add up to in 6 months. After all, your treatment surrounds these factors. If the cost of treatment is hefty and you are not far away from retirement, use the combo of both a bank loan and loan against PF account to ensure your retirement goals are not hurt. The bank loan will require paying the Equated Monthly Installment (EMI) for the tenure you choose to service the debt. So, choose the loan wisely considering the interest rate. If the retirement is far away from now and the eligible EPF advance is sufficient for treatment, you can use the eligible amount and do away with a loan. With so many years left for you, chances of building sufficient retirement corpus are prominent compared to when you are a few years away from the stark reality of life.