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KUALA LUMPUR: The government plans to expand the scope of Employee Provident Fund (EPF) contributors to make withdrawals from Account 1, says Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
The finance minister said he was in talks with EPF about how this could be scaled up to benefit more than 600,000 people, the initial target in the 2021 budget.
“Please wait a few more days for the EPF and I to make an announcement.
“Hopefully we can expand this to benefit over 600,000 Malaysians
“We will also give a detailed explanation of why we are doing it,” he said.
When presenting Budget 2021 on November 6, Zafrul announced a facility to withdraw EPF savings from Account 1 specifically.
Eligible taxpayers will be allowed to withdraw RM500 per month of up to RM6,000 for 12 months, to help those who have lost their jobs and ease their financial burden.
Total withdrawals from Account 1 are projected to involve RM4bil.
Zafrul also said that the government was reluctant to allow withdrawals from Account 1 initially due to concerns about Malaysian savings for the future, but at the same time, it was also concerned about the well-being of the people.
“Along with i-Lestari’s withdrawal facility, the total withdrawals allowed will be up to RM12,000.
“Under i-Lestari, where EPF members can withdraw RM500 a month from Account 2 until April, a total of 4.7 million workers have benefited, with a total close to RM12bil,” he said.
Under the 2021 Budget, the government is also reducing the EPF minimum contribution rate of employees from 11% to 9% as of January 2021 for a period of 12 months to increase the take-home pay.
Zafrul said this would inject RM9.3 billion liquidity into the Malaysian economy.
“With the RM12bil from withdrawals from Account 2 and these RM9.3bil, there will be additional liquidity of RM21.3 in the economy,” he said.
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