EPFO pension eligibility rules for mid-job breaks explained

The Employees’ Provident Fund Organization (EPFO) is a scheme for salaried people that offers pension benefits after a specified amount of service. Thus, according EPFO regulations, 12 per cent of an employee’s basic income is deposited in EPFO, of which 8.33 per cent is set aside for the pension account and 3.67 per cent for the Employees’ Provident Fund (EPF).However, what happens if an employee leaves their job or takes a break mid-way? Do they lose out on their pension entitlement?

EPFO rules state that an employee’s job tenure is taken into account, even if they take a break mid-way. In other words, if a person rejoins their job after a gap of a few years, their previous years of service will be added to their current tenure. To avail of the pension scheme of EPF, an employee must have worked for a minimum of 10 years. If an employee changes companies, their Unique Account Number (UAN) remains the same and the duration of their total job tenure is calculated by removing any gaps in between.

Let’s take an example: If an individual works for a company for 7 years and takes a one-year break, followed by another 4 years of work, their total job tenure will be considered as 11 years. In this scenario, the employee will be entitled to EPF pension benefits. Moreover, if a person works for 9.5 years, they are eligible for a 6-month grace period, which is equivalent to 10 years, as per the rules of EPFO.

The EPFO scheme is an important financial instrument for salaried individuals, as it ensures pension benefits after retirement. It is important to note that the job tenure requirement for pension eligibility is a crucial aspect that every EPFO subscriber should be aware of. So, if you are an EPFO subscriber and have taken a break from your job, you can still avail of the pension scheme by ensuring a total job tenure of 10 years or more.