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PUTRAJAYA: The government is studying suggestions to allow certain taxpayers, such as laid off workers, to withdraw funds from Account 1 of the Employee Provident Fund (EPF).
“I spoke with the Ministry of Finance and we basically agreed and we are prepared to study the proposal for taxpayers who really need to withdraw allocations from Account 1,” Prime Minister Tan Sri Muhyiddin Yassin said today.
The government had already implemented a relaxation in 2020 related to the EPF, especially by allowing the worker contribution rate to be reduced to 7.0 percent from 11 percent and also the withdrawal of i-Lestari from Account 2 of RM6 , 000 per taxpayer.
Almost 70 percent of EPF members had chosen to reduce the workers’ contribution to 7.0 percent, which has now increased disposable income to about RM700 million per month, he said in an interview with BERNAMA and local TV stations ahead of the 2021 budget on Friday.
At the same time, more than 30 percent of EPF members have savings of less than RM5,000 in their accounts, so EPF savings may not necessarily address taxpayers’ cash flow problems.
“(There are) some who have contributions of less than RM1,000. Therefore, EPF’s savings will not necessarily be able to solve their cash flow problem.
“If they retire, they won’t have savings for their future,” he said.
Account 1 consists of 70 percent of the workers’ contribution and is specifically for retirement.
“However, the government is always ready to study the proposal to help the Rakyat who are facing difficulties and really need (the funds).”
As a responsible government, it must balance the short-term needs of those affected with their long-term future and retirement savings requirements, he said.
On the call from various parties to extend the loan moratorium, Muhyiddin said the government had discussed the matter with Bank Negara Malaysia (BNM) and the Banking Association of Malaysia.
“The government has received many responses about the need to extend the moratorium especially for those affected.”
Therefore, the government will examine the approach to facilitate the process for those who really need support, he said. – Bernama
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