Finance Minister: Scope for EPF withdrawals to be widened to help 600,000 people

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz. - Bernama

KUALA LUMPUR: The government is planning to widen the scope for Employees Provident Fund (EPF) contributors to make Account 1 withdrawals, says Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

The Finance Minister said he was in discussions with EPF on how this could be expanded to benefit more than 600,000 people – the initial target in Budget 2021.

"Wait for a few more days for the EPF and myself to make an announcement.

"Hopefully, we can extend this to benefit more than 600,000 Malaysians

"We will also give a detailed explanation why we are doing so," he said.

In tabling Budget 2021 on Nov 6, Zafrul announced a facility to withdraw EPF savings from Account 1 on a targeted basis.

Eligible contributors will be allowed to withdraw RM500 a month of up to RM6,000 over 12 months, to assist those who have lost their jobs and to lighten their financial burden.

It is projected that the total withdrawals from Account 1 will involve RM4bil.

Zafrul also said that the government was reluctant to allow Account 1 withdrawals initially due to concerns over the savings of Malaysians for the future but at the same time, it was also concerned about the people's well-being.

"Coupled with the i-Lestari withdrawal facility, the total allowed withdrawals will be up to RM12,000.

"Under i-Lestari, where EPF members are allowed to withdraw RM500 monthly from Account 2 until April, a total of 4.7 million workers have benefited from it, with a total of close to RM12bil," he said.

Under Budget 2021, the government is also reducing the minimum employee EPF contribution rate from 11% to 9% starting January 2021 for a period of 12 months to increase take-home pay.

Zafrul said this would pump a liquidity of RM9.3bil into the Malaysian economy.

"With the RM12bil from Account 2 withdrawals and this RM9.3bil, there will be an additional RM21.3 liquidity in the economy," he said.

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