Facing EPF Overpayment Recovery: Can I Negotiate Repayment While Unemployed?

Dear Sir, I worked in a private company and paid PF contributions during the period from 2005 to 2012. Both employer and employee contributions were paid regularly. I resigned from my job in 2012 and applied for PF settlement through my employer as per the procedure. However, I am unaware of the balance in my account as I did not receive the statement slip up to that date. I received a direct credit to my savings bank account from the PF Office, with only an SMS notification of the total amount credited. I did not verify the correctness of the amount and spent the money.

Recently, my previous employer contacted me, informing me that they received a communication from the PF Office to recover around Rs.23,000 from me, which was allegedly overpaid during the settlement process.

They mentioned that if I do not repay the excess amount, the PF Office authorities would involve the police and take action against the employer. Despite having my address as per the settlement forms, I did not receive any direct communication from the PF Office. Now, my previous employer is urging me to repay the excess amount.

Currently, I am unemployed and facing financial difficulties. I seek clarification on the following concerns:

1. Can the police take action against the employer instead of the employee who received the excess payment?

2. Is there a possibility for the PF Office to accept repayment of the excess amount?

3. Can I negotiate a repayment plan in installments, considering my current unemployment status?

4. Is it viable to file a complaint with a forum like the Consumer Court, given that the excess payment was not my fault and there was no communication regarding the settlement calculations from the PF Office?

5. Would the employer be relieved if they disclose my address to the PF Office and request direct action against me?

I would appreciate your guidance in resolving this issue.

Thanks and Regards,
Anbu

Refunding Excess PF Money

If inadvertently excess money is given to you, the same is to be refunded to the PF Department. You may ask for a letter and challan for the refund of money, and I suggest that the money must be deposited in the Bank Account of EPF through the challan.

If you want to know the correct position of the funds, you may raise a grievance at the EPFO portal and ask for FORM-K, which contains the details of funds at credit in your account along with pension service and funds at the time of settlement of the account. If anybody calls you to refund the money, you can say that you have asked for Form-K to check, and as soon as you receive the Form, you will manage to refund the amount.

After receiving the Form-K, you can check the funds received in your account.

Thanks,

Regards,
V K Gupta

I have only heard of such a case twice in the last few decades. Can you let us know the PF office where your settlement was done?

The claim forms (19 & 10C) are duly signed by your previous establishment's authorized signatory. It is the responsibility of this authorized personnel to check for the details related to your employment mentioned in the forms. You may kindly note that the remittance made by the PF Office to the member's account is after several checks (at least by 3 people including the respective concerned clerk, the officer, and the section head - and then signed-off by the respective Asst. Commissioner/Commissioner responsible for the Group under which your establishment is covered), inclusive of their manual records which they verify thoroughly. In case there is any mismatch in either the date/s or the contribution amount or for that matter the name imprint on the canceled check, the forms are simply rejected, and an intimation is sent - as a text message on the mobile number furnished in the form - by post to the establishment at the address registered in their database.

In case there has been a goof-up/mistake in the calculation of the settlement amount, it's due to the fault of the PF Office and/or due to the incorrect information furnished by the authorized personnel of your previous establishment. In other words, as you rightly said, it's because of no fault of yours. And they CANNOT threaten you for the same.

(Can you let me know the date when you submitted the claim form, the date when the amount was remitted into your bank account, and the date when your previous employer called you? I just want to see for how long the PF Office/Your employer was sleeping over this goof-up).

My advice to you is to sit calm and wait for a formal intimation from the PF Office. YOU NEED NOT HAVE TO WORRY OR LOSE YOUR SLEEP OVER IT. Even if you realize that an excess amount has been paid to you (after being fully satisfied with the documentary evidence sent to you by the PF Office), you can always send a polite reply seeking payment in installments/payment within a certain period of time owing to your unemployment in the current scenario.

Cheers & Stay tension-free

Regards,
A.B.

Request for Senior Comments on EPFO Responsibility

Can any senior make more comments on this issue? Whether EPFO can take responsibility for mistakes/errors made by EPFO itself and recover it from the employer?

In claim forms Form No. 19 & 10, the employer's signature authenticates the claimant. The employer does not provide any new or additional information except for the current year's 3A. Under the circumstances, if due to any calculation mistakes by EPFO, a member receives a short or excess payment, how can the employer be held responsible? And why is the employer responsible for its recovery, especially from an ex-employee?

I request seniors to provide a brief with legal grounds.

Thanks and regards

EPFO Responsibility for Errors and Recovery from Employers

No. The excess money has been received in your account by mistake, carelessness, or whatever reason. Once the company or PF authorities confirm that excess payment has been made and show how it is in excess, you should return it to the PF office. Don't consider whether the employer can pay back or think about installment recovery, etc. The money is not yours; return it to the rightful owner. Don't even have second thoughts.

Though the EPFO has my address and contact number, they have not yet contacted me directly regarding this recovery. They have sent a letter to the employer only to recover from their ex-employee. Now, due to the pressure from my employer, I have to repay the excess money to EPFO.

Moreover, I am not employed anywhere due to my higher studies. My ex-employer urges me to pay the money immediately. I made a request to pay by installment, but they hesitated to permit it. If it is excess, we have to refund it. There is no doubt about it. But after more than 2 1/2 years of payment, they asked to refund it immediately.

Can We File a Complaint with Any Forum on the Employer and EPFO?

Please advise.

Thanks,

Anbu

You have already spent the money that you unknowingly received in your account long ago, and you are currently not in a position to repay the excess amount in one go. To date, you have not received any official intimation from either the PF Office or from your ex-employer.

Don't worry. Nobody is going to put you in jail. You can consider the repayment process ONLY IF you receive an official intimation from the respective PF Office or a lawyer's notice on behalf of your company. You have every legal right to respond by stating that you do not have the money and can only pay back in installments. However, that's only after a detailed scrutiny/verification of your due amount. In the worst-case scenario, even if things escalate, with an average lawyer, it would take months for this case to be resolved.

So, focus on your studies and enjoy life. Come back only if you receive any form of written correspondence from either of the parties.

Cheers,
A.B.

Thanks for the ongoing discussions as they have led to an increase in knowledge. However, one reply is still awaited: How is the employer responsible in this case, and is he supposed to make the recovery from the ex-employee? If yes, how can he do so?

It seems very strange to me that you are in a panic after receiving a letter from your previous employer to return the amount which the PF Office has paid you in excess. Have they given you any details of the excess amount, month-wise amount deducted from you and paid to the PF Office, and how the excess is calculated? Ask them for all these details in writing and don't meekly submit to the demand of your employer. Why are you getting afraid? Have you cheated anybody? They say that they have paid you in excess without providing any proof. Why are you simply getting nervous? It is your employer who should have been nervous, not you. Don't worry. Unless you get a detailed calculation proving the excess payment, nobody can harm you, nor can any complaint be filed against you. They are only trying shortcut methods to quickly recover from you.

I feel something is amiss. The PF authorities, in the first place, should have informed you of the excess payment, if any. You may inform the ex-employer, in writing, that you would take appropriate action once the PF authorities inform you of the excess to be refunded. No criminal action lies in the circumstances stated.

By the way, other than the phone calls, has the ex-employer given anything in writing?