Following today’s Economic Action Council meeting, Prime Minister Muhyiddin Yassin has announced several initiatives to ease the burden of Malaysians during the COVID-19 outbreak. One of the key initiatives is to allow Malaysians to withdraw funds from their Employees Provident Fund (EPF) account. Eligible members will be permitted to withdraw a maximum of RM500 a month to ease their financial situation.
Eligible members can withdraw up to RM500/month from Account 2 for a period of 12 months. This is only applicable to EPF members aged below 55 years old.
For EPF members that are interested to withdraw, you can apply to start from 1st April 2020. This initiative is expected to benefit approximately 12 million EPF members with an estimated total withdrawal of RM40 billion.
The Prime Minister has urged Malaysians to use the EPF withdrawal initiative wisely and use it to buy necessities. He said that it is important that all Malaysian families are able to put food on the table. The withdrawal money can be used to pay for water and electricity bills, or for rent.
The Prime Minister also reminds that although the monthly amount is small, the EPF is meant for retirement. However, the government offering Malaysians to utilise their retirement funds considering there are those that need it.
Earlier this month, the interim Prime Minister, Tun Mahathir, had announced the reduction of employee’s contribution rate from 11% to 7%. The reduction of EPF contribution rate is expected to unlock approximately RM10 billion worth of spending by consumers to boost the economy. The new rate will take effect from 1st April until 31st December 2020.
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