1. i-Sinar Scheme
From January 2021, eligible EPF members will be able to withdraw money from their Account 1 through the i-Sinar facility. In the beginning, it’s only for those that have lost their jobs, are on no-pay leave, or have no other source of income.
But, recently, the gahmen and EPF has decided to expand its eligibility process. Now, those that are suffering from pay cuts and self-employed can also apply for this initiative. Even non-active EPF members can apply too.
The application starts in mid of December 2020. The funds will be credited into members' bank accounts one month after their i-Sinar application has been approved. First crediting will take place in January 2021. Advances will be made over a period of 6 months from the first date.
Types of Categories:
- Can be applied for those workers in the formal sector, self-employed, gig economy workers, non-active KWSP members, retrenched workers, housewife or for workers that are on no-pay leave
- As long as these workers...
- Haven’t contributed to EPF for two (2) consecutive months when applying
- Still working but their base salary got reduced at least 30% or more after March 2020
- For these members, no need to have any supporting documents - their applications are automatically approved!
- Can start applying from 21 December 2020 at https://isinar.kwsp.gov.my/
- EPF members that are still working but their income has been reduced by 30% or more. This includes other benefits such as allowance and overtime.
- For this category, members need to have:
- Payslip before and after income reduction
- Notice of suspension/reduction of allowances and overtime
- Can start applying from 11 January 2021 at https://isinar.kwsp.gov.my/
- Application for this category will take two (2) to three (3) weeks to get approved. The first payment will be made before the end of the next month.
- For those who have RM100,000 and below (Account 1), they have access to any amount up to RM10,000. The amount advanced will be staggered over a period of six (6) months with an increased first advance of up to RM5,000.
- For those who have above RM100,000 (Account 1), they have access of up to 10% of their Account 1 savings. However, the maximum total amount allowed to be advanced is RM60,000. The amount advanced will be staggered over a period of six (6) months with an increased first advance of up to RM10,000.
- TAKE NOTE: Unlike i-Lestari, i-Sinar is not a withdrawal facility but an advance instead. Members that applied for i-Sinar are required to replace the full amount advanced. This is done by channelling 100% of future contributions to Account 1 until the advance amount is replenished. Once settled, your contribution reverts back to the usual split of 70% to Account 1 and 30% to Account 2.
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2. Incapacitation Withdrawal
This is only applicable to those who are mentally or physically incapable of working. A specialist doctor, both from a private hospital or a public hospital, must evaluate the person for incapacitation and prepare a medical report, which would be submitted with the application. The member must be unemployed to enable EPF withdrawal.
Entire EPF savings.
- Other than withdrawing the entire EPF savings, the member is also eligible for a one-time RM 5,000 incapacitation benefit from EPF, which is subject to these conditions.
- If the person is re-employed after applying for the incapacitation withdrawal, he/she will have to re-contribute to EPF based on the statutory rate.
- The member will receive the declared dividend in the year of the withdrawal.
3. Education Withdrawal
This withdrawal is offered to those who want to finance their higher level of education in accredited local or oversea universities, either for themselves or for their children. Additionally, this withdrawal can also be used to reduce/settle an existing study loan.
Costs covered include tuition fees, student hostels/lodging fees and withdrawal for fully settle/reduce study loan.
The balance of tuition fees or whole Account 2 savings (whichever is lower).
- The person can request for withdrawal every semester or every academic year. For every subsequent withdrawal, it is compulsory to submit the withdrawal form along with the supporting documents.
- For those who have already made payments to the Institution of Higher Learning in question can still apply for Education withdrawal.
- This withdrawal does not apply to those who have received sponsorship (scholarship, study assistance, study loan).
4. Pensionable Employees Withdrawal And Optional Retirement Withdrawal
EPF members who are still employed in the Public Service and are eligible to receive pensions are eligible for the Pensionable Employees Withdrawal.
Optional retirement withdrawal, on the other hand, allows EPF members who opt for early retirement from the Public Service to withdraw their contribution from EPF.
The employee’s share of the contributions, including the dividends accrued on the contributions, after returning the government’s share of contributions to Retirement Fund (Incorporated) (KWAP).
- Following the pensionable employees' withdrawal, the employee is no longer an EPF member as he is considered to have made a full withdrawal of his savings. If he is re-employed with a private agency in future, he is obligated to re-contribute to EPF using the same EPF number again.
- The employee can choose to re-contribute to EPF even after opting for the pensionable employees' withdrawal by filling in the KWSP 6A (1) Form. The statutory contribution rate is no less than RM50.00 and no more than RM5,000.00 per month. However, the contribution is part of the member’s salary only and member’s employer is no longer required to contribute.
5. Members Investment Withdrawal
Under this scheme, members’ with savings that exceed their Account 1 basic savings amount by at least RM 5,000, are allowed to withdraw 20% from the excess savings to be invested through Ministry of Finance approved Fund Management Institutions (FMI).
This table lists the benchmarked basic savings according to members’ ages.
The maximum withdrawal sum is calculated as follows:
(Account 1 – Basic Savings) x 20%
- Depending on the members’ savings in Account 1, a subsequent investment may be done in 3 months following the previous transfer.
- Once the investment units are sold, the withdrawn sum AND the gains from the investment must be returned to the members’ Account 1.
- Members are not allowed to withdraw sums from said investment.
- The EPF dividends will only be based on existing savings in EPF Accounts. Thus, the withdrawn amount will not be considered for dividends.
- There is no service charge for investment through FMIs.
6. Savings of More than RM1 Million Withdrawal
This withdrawal allows EPF members to withdraw their savings if their credit is at least RM1.05 million.
No less than RM50,000 from Account 2. If insufficient, the balance will be taken from Account 1.
- The total savings must be cash savings in EPF only and does not include the savings invested with the approved External Fund Managers or the Insurance Companies for Annuity.
- Withdrawal can be done once in 3 months, and a new application is needed for each withdrawal.
7. Health Withdrawal
Health withdrawal allows EPF members to withdraw their savings from Account 2 to pay for medical expenses incurred for the treatment of critical illnesses AND/OR to buy medical aid equipment, as approved by the EPF Board, for themselves or their allowed family members.
Cost actual medical cost or whole Account 2 savings. (Whichever is lower)
- If the employer has covered part of the medical expenses, employees can withdraw the remaining balance subjected to the savings balance in Account 2.
- The list of critical illnesses approved by the EPF Board is here.
8. Hajj Withdrawal
As of 2013, certain members are allowed to withdraw savings from their Account 2 to fund their Hajj trip. The amount, however, is capped and should only be used to supplement basic expenses; not the entire cost of the trip. This is so that the withdrawal would not undermine the members’ retirement savings.
To be eligible for the withdrawal, one or more of the following must be true:
- Members below 55 years old, who’ve received a letter with the ‘SELECTED’ status from Lembaga Tabung Haji (LTH);
- Members with insufficient savings in LTH.
The allowed withdrawal sum is the lower of the two methods listed below:
- Members’ LTH Savings – Total Cost for Hajj < RM 3,000
- Account 2 balance
The total cost for Hajj, as prescribed by LTH, depends upon the different years. For example, for the current first-time pilgrims, Hajj fees are RM 9,980. Note that, this cost is subsidized (RM 6,175) by LTH for first-time pilgrims. This subsidy is not offered to those who have already performed Hajj before.
- The EPF/KWSP Hajj Withdrawal is only offered once to all applicants.
So, how now?
There are numerous options for EPF/KWSP withdrawals that aren’t known to many. That said, you must weigh the pros and cons of taking money out of your EPF accounts. The extra cash could come in handy in future. For a list of other EPF/KWSP withdrawals please refer to their website over here.