KUALA LUMPUR, Dec 26 — The Public Service Department (JPA) recently released a circular announcing a slew of allowance cuts as part of a policy shake-up meant to tighten its annuity system.

Among those affected by the move was the Critical Services Incentive Payment (BIPK), a special allowance intended to attract and retain skilled workers in professions deemed vital to the country’s development.

The policy review has sparked widespread backlash, including criticism from Cabinet ministers who said the allowance cut could drive talent out of the public sector.

In this article, Malay Mail explains some of the key questions surrounding the latest policy.

What is being cut?

The BIPK was among nine items listed for termination in the circular.

Other items included: incentives for human waste disposal and for typing in the Jawi script; and allowances for electrical generator operators, typing room supervisors, and trigonometric observation.

Under BIPK, civil servants under the management and professional category enjoy an additional five per cent allowance on top of their monthly salaries.

Professionals in the medical field, however, are paid a fixed allowance of RM750 in addition to their monthly salary.

Those in administrative roles within these fields are also eligible. The quantum of allowance is a tenth of monthly salary with the exception of nurses, who gets 15 per cent.

When will the cut begin?

JPA said in the 27 years since BIPK was first implemented in 1992, reviews have only been carried out thrice, in 1997, 2001, and 2007.

Subsequently, the circular on the review was released on December 20 this year.

The new policy will take effect on January 1, 2020.

Who will be affected?

As at 2018, the government listed 33 professions as eligible for the BIPK.

These jobs include medical officers and pharmacists, architects, engineers and assistant engineers, legal officers, agricultural and marine engineers, and medical researchers.

But the JPA said no current staff, permanent or temporary, will be affected by the benefit roll back.

It said existing BIPK recipients will continue to receive it under existing rates up until the recipient leaves the service.

Meanwhile, contractual service officers still qualify to receive the allowance as long as they are reappointed via contract continuously with no disruption in their service duration, up until the contract expires.

However, those employed into the public sector starting January 2020 will no longer enjoy the incentive.

Why did Putrajaya decide on the cut?

The JPA said a comprehensive policy review was overdue and necessary to “strengthen” its public sector allowance distribution system.

The exercise entailed redefining the basis for allowances and setting new criteria, terminating allowances no longer deemed “relevant”, and streamlining conditions for eligibility.

The BIPK was abolished because it no longer served its purpose, the JPA said in a frequently asked questions to explain the new policy. The incentive was introduced in 1992 to draw talents into critical fields within the public sector, jobs that were rare and paid lowly at the time.

A review by the Special Cabinet Committee on Public Service Reform chaired by Prime Minister Tun Dr Mahathir Mohamad, the first since 2007, concluded these professions no longer offered low salaries nor are they hard to fill.

How much will Putrajaya save from the cut?

It’s not yet clear as to how much savings the government can make from the policy. But what is clear is that the BIPK was likely terminated as part of a leaning-out exercise.

From the moment it took office, the Pakatan Harapan coalition had said it would look into ways to plug “leakages” and tighten spending.

The Malaysian government allocates nearly a third of its annual operating expenditure for emolument alone. In 2019, the spending was RM259 billion and over RM82 billion went to payroll the civil service.

Where will this cut hurt the most?

Based on the positions offered the BIPK it is likely that the impact be most felt in public healthcare.

Most government hospitals are already shorthanded both in medical experts and supporting staff, and there are concerns that the benefit cut would drive graduates into the private sector where pay is much higher.

In an online petition against the move, the Malaysian Medical Association claimed healthcare professionals seem to be specifically targeted when it comes to budget cuts, and there seems to be an ever-increasing burden being placed on junior doctors.


Reacting to the policy announcement, Minister of Health Datuk Seri Dzulkefly Ahmad had on Twitter called for immediate explanation by the JPA.