KUALA LUMPUR, Nov 6 ― The government will allow a monthly withdrawal of RM500 from Account 1 of the Employees’ Provident Fund (EPF) to assist those who have lost their jobs due to the Covid-19 pandemic, Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz announced today.
In his Budget 2021 speech, Tengku Zafrul said a withdrawal of up to RM6,000 for a period of 12 months is aimed at alleviating financial hardship faced amongst its 600,000 members.
“It is projected that the overall payment for the Account 1 withdrawal will involve RM4 billion. Eligible members can start applying from January 2021 onwards,” he said.
Account 1 consists of 70 per cent of workers’ contribution and is specifically meant for their retirement.
Earlier today, Tengku Zafrul also said the minimum employee EPF contribution rate will be reduced from 11 to 9 per cent for a period of 12 months beginning January 2021, with the move aimed at increasing take-home pay.
Tengku Zafrul’s latest announcement is in addition to an earlier announcement made in March where contributors can withdraw up to RM500 monthly for a period of 12 months from their Account 2 through EPF’s i-Lestari withdrawal facility.
The initiative, introduced in April, was meant to ease the financial burden of EPF members and help them meet their basic monthly financial needs during the Covid-19 pandemic.
“Taking into account both i-Lestari and this Account 1 withdrawal facility, the total allowed withdrawal will be up to RM12,000,” Tengku Zafrul added.
In addition, he also said EPF will allow members to withdraw from their Account 2 to purchase insurance and takaful products which are approved by EPF relating to life and critical illnesses coverage for themselves and their families.