Budget 2021: Financial aids available for Malaysians

graphic by MZUKRI MOHAMAD

THE government has announced various financial assistance to eligible recipients, in Budget 2021, aimed to enhance the people’s lives, as well as alleviating the living costs. Here are some of the initiatives:

Improving Financial

Financial assistance for persons with disabilities (OKU) who are incapable of work is increased from RM250 to RM300.
Financial assistance for older persons, carers of bedridden OKU and chronically ill patient is increased from RM350 to RM500.
The rate for incentive allowance for disabled workers is increased from RM400 to RM450.
Financial assistance for children is increased from RM100 per child with a maximum of RM450 per family, to RM150 per child aged seven to 18, or RM200 per child aged six and below, with a maximum of RM1,000 per family.

Bantuan Prihatin Rakyat (BPR)

Under Budget 2021, the government will continue to implement and improve the cash assistance in a more targeted manner through the BPR which will replace the Bantuan Sara Hidup (BSH).
Overall, the BPR cash assistance is expected to benefit 8.1 million individuals with an allocation of RM6.5 billion compared to 4.3 million beneficiaries with an allocation of RM5 billion prior to this under the BSH.
Families with monthly household income of less than RM2,500 and has up to one child will receive assistance of RM1,200, while households with two or more children will receive assistance of RM1,800.
Families with monthly household income between RM2,501 and RM4,000 and one child will receive BPR assistance of RM800, while households with two or more children will receive assistance of RM1,200.
The government will also assist families with monthly household income between RM4,001 and RM5,000. This category will receive RM500 for those with up to one child, and assistance of RM750 for households with two or more children.
Single individuals earning RM2,500 and below will receive assistance of RM350. The age limit eligibility for this group has been lowered to 21 years old from 40 years old.
The Jaringan Prihatin Programme aims to alleviate the financial burden of the bottom 40% (B40) group in accessing Internet services.
Income tax reduction for resident individuals will be reduced by one percentage point for the chargeable income band of RM50,001 to RM70,000, estimated to benefit 1.4 million taxpayers.
Banks will enhance the Targeted Loan Repayment Assistance (TRA) to B40 borrowers who are BSH or BPR recipients, and to micro-enterprises with loans of up to RM150,000.

Alleviating Living Cost

The minimum employee’s Employees Provident Fund’s (EPF) contribution rate is reduced from 11% to 9% beginning January 2021 for a period of 12 months to increase take-home pay. This will benefit EPF contributors with a potential cashflow of up to RM9.3 billion.
The facility to withdraw EPF savings from Account 1 is on a targeted basis. The amount allowed will be RM500 a month with a total of up to RM6,000 over 12 months. This withdrawal will assist members who have lost their jobs.
Enhancement of the Employment Insurance Scheme. The Job Search Allowance for those covered under the Social Security Organisation’s (Socso) Employment Insurance System is currently for six months starting at a rate of 80% of the employee’s monthly salary and gradually decreases to the rate of 30% of the employee’s monthly salary.
For years of assessment 2020 and 2021, the income tax exemption limit for compensation for loss of employment will be increased from RM10,000 to RM20,000 for each full year of service to assist taxpayers who have lost their jobs due to the current economic condition.
The government will allocate nearly RM28 billion specifically for subsidies, aids and incentives, including aid for the community in the form of transportation and welfare, and subsidies to control the price increase of goods and services.

Assistance to Farmers and Fishermen

Allocation for the Rubber Production Incentive will be doubled from RM150 million to RM300 million to help stabilise the income of 150,000 rubber smallholders.
An allocation of RM1.7 billion will be provided in the form of subsidy, aid and incentive to farmers and fishermen, including paddy price subsidy of RM570 million, subsidy and incentive for paddy crop of RM960 million, subsidy for Padi Bukit fertilisers of RM40 million.
Allowance for fishermen will be increased from RM250 to RM300 per month commencing in 2021.
An allocation of RM400 million to assist Felda settlers to write-off the interest on the settlers’ debt, as well as development programmes for settlers to generate additional income.

Hiring Incentives

Incentive for employees earning RM1,500 and above will be enhanced from a flat rate of RM800 per month to 40% of monthly income, subject to a maximum incentive of RM4,000.
To encourage employment for the disabled, long-term unemployed and retrenched workers, employers will be given an additional incentive equivalent to 20% of the employee’s monthly income, making the total incentive to employers’ amount to 60%.
For sectors with a high reliance on foreign workers, such as construction and plantations, a special incentive of 60% of monthly wages will be provided, whereby 40% will be channelled to the employer, while 20% will be channelled as a wage top-up to the local worker replacing the foreign worker.
For those employed under the PenjanaKerjaya, the maximum training rate which can be claimed by employers will be increased from RM4,000 to RM7,000 to enable workers to take up high skilled training and professional certifications.

Reskilling and Upskilling

RM150 million will be allocated for the Ministry of Higher Education professional certification (KPT-PACE) whereby fresh graduates will each be eligible for a voucher worth RM3,000 to pursue a professional certification course at public or private universities.
RM100 million to the Human Resources Development Fund to implement trainings in collaboration with private-sector employers.
The government will introduce MySTEP or Short-term Employment Programme with an allocation of more than RM700 million. This initiative will offer 50,000 job opportunities on a contract basis in the public sector and government-linked companies starting January 2021.

Targeted Wage Subsidy

The Wage Subsidy Programme will be extended for another three months with a more targeted approach, specifically for the tourism sector, which includes the retail sector at a rate of RM600 per month for workers earning RM4,000 and below.
In addition, the limit of 200 employees per application will be increased to 500 employees. A total of RM1.5 billion is allocated for this purpose and is expected to help about 70,000 employers and 900,000 employees.

Social Protection

The EPF will allow members to withdraw from Account 2 to purchase insurance and takaful products which are approved by EPF relating to life and critical illnesses coverage for themselves and their family.
To further encourage old-age savings through Private Retirement Scheme (PRS), individual income tax relief of up to RM3,000 on the PRS contributions will be extended until the year of assessment 2025.

Community-based Initiatives

On the welfare of the elderly and the disabled through the Home Help Services Programme, the honorarium value for volunteers under this programme will be increased from RM150 to a maximum of RM400.
Meanwhile, the assistance value to the vulnerable group of the programme will also be increased from RM30 to RM80, expected to benefit more than 2,000 volunteers and more than 8,000 senior citizens and the disabled.
Additional tax relief limit for disabled spouse will be increased from RM3,500 to RM5,000.
The Community Rehabilitation Organisation staff rate will be increased from RM800 to RM1,200 per month, while the rate of supervisors will be increased from RM1,200 to RM1,500 per month.
The annual financial aid to operate the Senior Citizens Activity Centre managed by NGOs will be increased from RM33,000 to RM50,000.
Further tax deduction on remuneration given to employers who employ senior citizens is extended until year of assessment 2025.