Enhanced wage subsidies, advanced EPF withdrawals and more in Malaysia's RM15bn PERMAI package

The new package, announced on 18 January, will see the enhancement of the Wage Subsidy Programme, whereby all employers operating in the MCO states will be eligible to apply, irrespective of their sector.

Malaysia's Prime Minister Tan Sri Muhyiddin Yassin has announced a new assistance package, as part of the Government's ongoing efforts in "ensuring the Rakyat's wellbeing, business continuity and economic resilience."

Named Perlindungan Ekonomi dan Rakyat Malaysia (PERMAI), the RM15bn package will improve on the existing, ongoing initiatives introduced in the previous assistance packages, and accelerate the implementation of related initiatives, PM Muhyiddin said.  

A total of 22 initiatives will be implemented under PERMAI, anchored on the three main objectives:

#1 Combating the COVID-19 outbreak;
#2 Safeguarding the welfare of the people; and
#3 Supporting business continuity

These include an improved Wage Subsidy Programme (PSU 3.0), enhancements to the EPF i-Sinar Programme, a continuation of the Prihatin Special Grant, and more, detailed below.

PM Muhyiddin noted that to finance this package, the Government will re-allocate existing funds based on current priorities and through more prudent spending.

Objective #1: Combating the COVID-19 outbreak

As part of this objective, the Government has provided an additional allocation of RM1bn, of which RM800mn has been set aside for the Ministry of Health and the balance for the National Security Council and other relevant agencies.

This allocation will focus on supplies, including additional reagents and screening kits, and personal protective equipment, specifically for healthcare frontliners.

There are a total of four initiatives geared towards achieving this objective.

Initiative #1: Implementing the COVID-19 vaccination programme

On this first initiative, PM Muhyiddin shared: "I am pleased to announce that the planning for our vaccination programme is on-track. The Government has signed three agreements with vaccine producers, and is expected to receive the first batch of vaccines by the end of February.

Through the established Special Committee on Ensuring Access to COVID-19 Vaccine Supply, the Government will ensure transparency in the procurement of vaccines and give the utmost priority to the National Immunisation Programme."

A total of RM3bn has been allocated specifically for this purpose.

Guidelines and methods on receiving the vaccine will be announced soon. "Realistically, the vaccination programme will be implemented in phases over a period of 12 months. This means the first batch is expected to be vaccinated by early March, and Malaysia is expected to meet its target of vaccinating more than 80% of its population, or close to 27mn people, by the first quarter of 2022."

The PM further shared that the Special Muzakarah Committee of the National Council for Malaysian Islamic Affairs has decreed that the COVID-19 vaccine is allowed, and is a necessity for specific groups. "Ensuring the welfare of the community by protecting people from being infected by dangerous diseases is not something new from the (Islamic) Syarak perspective."

Initiative #2: Strengthening the national healthcare sector

In efforts to combat the pandemic, the recruitment of an additional 8,000 healthcare personnel for the Ministry of Health was approved last year. Taking the current situation into account, the Government will recruit an additional 3,500 healthcare personnel who will start working at the end of January, with an additional allocation of RM150mn to this.

These recruits comprise assistant medical officers, paramedics, laboratory technicians and nurses. PM Muhyiddin said: "My commitment is that the Government will increase the recruitment of healthcare professionals should the need arise to support the immunisation programme."

He added: "As announced during Budget 2021, the one-off provision of RM500 to healthcare frontliners and RM300 to other frontliners will be paid in the first quarter of 2021. Meanwhile, the existing special monthly allowance of RM600 to healthcare frontliners and RM200 to other frontliners will continue until the COVID-19 pandemic is over."

Initiative 3: Enhancing cooperation with private hospitals

To further enhance cooperation between the public and private sectors in combating the COVID-19 pandemic, private hospitals have agreed to receive and treat both COVID-19 and non-COVID-19 patients to help alleviate the strain on the public healthcare system. The Government will allocate RM100mn for this purpose.

Initiative 4: Stepping up testing of employees

As part of SOPs for the construction of buildings during the MCO, employers are required to provide suitable accommodation and confine their employees to the construction sites. In this regard, employers are advised to tighten the SOPs, improve their foreign workers’ accommodation and movement control as well as increase screening of employees to support efforts to curb the spread of COVID-19.

At the same time, the Social Security Organisation (SOCSO) is involved in the COVID-19 Screening Test Programme on registered foreign workers. The cost of screening will be borne fully by SOCSO in red zones to identify possible COVID-19 clusters at workplace. As at 17 January 2021, 160,982 foreign workers had undergone screening for COVID-19 under this programme, since the start on 1 December 2020.

To support more individuals to do COVID-19 screening and detection tests privately, the scope for tax relief relating to full health screening expenses, which was increased from RM500 to RM1,000 in Budget 2021, has now been expanded to also cover COVID-19 screening.

Objective #2: Safeguarding the Rakyat's welfare

The second objective of the PERMAI assistance package is to continue with efforts to safeguard the Rakyat’s welfare (the people's welfare) following the implementation of the MCO, especially the vulnerable groups and informal workers who are dependent on daily wages.

This objective will oversee a total of eight initiatives.

Initiative #5: Accelerating the Bantuan Prihatin Rakyat Assistance

Under the KITA PRIHATIN package introduced last year, the final payment of the Bantuan Prihatin Nasional or BPN 2.0 will be brought forward from 21 January 2021 onwards. A total of 11.1mn recipients will receive a total payment of RM2.38bn.

The first instalment of the Bantuan Prihatin Rakyat will involve more than eight million recipients. Households earning up to RM5,000 per month will receive RM300 each, while those under single category and earning up to RM2,000 per month will receive RM150.

Initiative #6: Strengthening welfare programmes

Under Budget 2021, the Government increased the monthly rate of welfare assistance under the Social Welfare Department (JKM) with effect from January 2021. This welfare assistance involves an allocation of RM2.2bn and will benefit more than 400,000 recipients.

Following this, the JKM will also implement a Food Basket Programme effective immediately, which will provide essential food items worth RM100 for each eligible household, involving a total allocation of RM50mn.

In addition to contributing towards protecting the welfare of the vulnerable groups, the Government will allocate RM25mn under the GLIC/GLC Disaster Relief Network programme as a matching grant with government-linked companies for social initiatives. This includes the provision of community assistance, including to the elderly, homeless, the disabled and flood victims.

PM Muhyiddin added: "In appreciation of the noble efforts of those who would like to make contributions towards curbing the spread of the COVID-19 pandemic, the Government has announced several incentives in the form of tax deductions for donors who have been assisting in cash and kind those impacted by the pandemic. Such donors are eligible for a tax deduction based on their gross business income or aggregate income."

Initiative #7: Continuing the moratorium and loan instalment reduction

Assistance in the form of moratorium and reduction of loan repayment instalments will continue during the MCO. The moratorium facility, including extension of the moratorium and restructuring of loan repayment will continue to be offered by banks. For flood-affected states, 15 banks have offered the loan repayment moratorium.

To date, more than 1.3mn borrowers have applied for and received such assistance, with an approval rate of 95% for individual borrowers and 99% for SME borrowers. 

Bank Negara Malaysia and the Credit Counselling and Debt Management Agency will be able to assist and advise borrowers via a phone call or online, should they face any difficulties in dealing with the banks.

Initiative #8: Enhancing the EPF i-Sinar Programme

Since 21 December 2020, the i-Sinar facility has been made available to all EPF members whose incomes have been affected by COVID-19. As at 13 January 2021, more than three million applications had been approved, with a total of RM24bn payable this year.

To further enhance the i-Sinar facility, especially for those facing challenges due to the MCO and floods, the Government has been informed that EPF will provide an advance of up to RM1,000 from the amount applied under the i-Sinar Category 2 facility.

The i-Sinar Category 2 advance withdrawal process has also been simplified so members need to only provide a self-declaration that they meet the prescribed criteria and submit the supporting documents online. Additionally, the Government has also requested that EPF facilitate the advance payment, which will commence on 26 January. Further details will be announced by EPF in the near future.

Initiative #9: Extending the special tax relief on the purchase of mobile phones, computers and tablets

In line with the new normal, there is greater reliance on the use of digital equipment, the PM said. Hence, the special tax relief of up to RM2,500 on the purchase of mobile phones, computers and tablets, which expired on 31 December 2020, will be extended for another year until the end of 2021.

Initiative #10: Extending the provision of free internet access

In assisting the public during the  MCO, the telecommunications industry had started providing free 1GB of data for the browsing of websites, including for educational purposes on 1 January 2021. This RM500mn facility will be extended until the end of April 2021.

Additionally, a special subscription package for students who are sitting for their SPM and STPM examinations will be extended to all students of higher learning institutions. This package will also be made available until the end of April 2021. 

Initiative #11: Extending the sales tax exemption on passenger vehicles

PM Muhyiddin shared: "To boost the sales of passenger vehicles affected by COVID-19 as part of the PENJANA package, the Government announced a sales tax exemption for locally assembled and imported passenger vehicles until 31 December 2020. The Government recently announced the extension of this exemption until 30 June 2021. 

"I trust this measure will continue to drive the growth momentum of the automotive sector."

Initiative #12: Extending the moratorium period for PTPTN borrowers

PTPTN (Perbadanan Tabung Pendidikan Tinggi Nasional, or National Higher Education Fund) borrowers affected by the COVID-19 pandemic or floods can apply for a three-month PTPTN loan repayment moratorium. Applications for this moratorium can be made until 31 March 2021.

Objective #3: Supporting business continuity

Under this objective, the Government will "endeavour to reduce the business sector's burden" through a series of measures, in helping combat challenges in cash flow, and utility and rental payments.  

A total of 10 initiatives will contribute to this objective.

Initiative #13: Improving the Wage Subsidy Programme

PM Muhyiddin noted that the Wage Subsidy Programme was among the "better received" initiatives by employees and employers. As such, the programme, under the purview of SOCSO, will be enhanced (Wage Subsidy 3.0) so that all employers operating in the MCO states will be eligible to apply, irrespective of sector.

For a period of one month, eligible employers will receive a wage subsidy of RM600 for each of their employee earning less than RM4,000. In addition, the wage subsidy limit of 200 employees for each employer will be increased to 500 employees.

This initiative involves an additional allocation of RM1bn which is estimated to benefit 250,000 workers employing more than 2.6mn workers.

Further, for those who lost their jobs during the MCO, the Government has agreed to relax the conditions for the Employment Insurance System programme (SIP PRIHATIN). Employees who do not meet the minimum contribution conditions, or whose contract was not extended after having been renewed for at least three times previously, are now eligible to apply for the SIP PRIHATIN assistance of 30% of their monthly salary for a period of three months.

Apart from the above, in appreciation of the contribution of delivery riders during this MCO period, the Government has allocated RM24mn to fund the full contribution under SOCSO’s Self-Employment Social Security Scheme.

To date, almost 32,000 applications from delivery riders have been received under the scheme.

Initiative #14: Continuing the Prihatin Special Grant

The Government will expand the Prihatin Special Grant Plus assistance to cover 500,000 SMEs in the seven MCO states with a payment of RM1,000 each, while 300,000 SMEs in other states will receive RM500 each. The expansion of this additional special grant (also known as the PERMAI Prihatin Special Grant), involves an additional allocation of RM650mn.

Initiative #15: Providing one-off financial assistance to taxi and bus drivers

To alleviate the burden faced by taxi and bus drivers, the Government has agreed to provide a one-off financial assistance of RM500 to 14,000 tourist guides as well as 118,000 drivers of taxis, school buses, tour buses, rental cars and e-hailing vehicles, with an additional allocation of RM66mn.

The Government currently provides exemption from excise duty and sales tax for the purpose of transfer, disposal and for private use of taxis, provided the vehicle is owned for seven years. This condition has now been reduced to five years, effective from 1 January to 31 December 2021.

Initiative #16: Accelerating the implementation of microcredit schemes

To assist with the cash flow of micro-enterprises and SMEs, the Government will expedite the implementation of microcredit schemes that had been announced previously. The implementation of RM1bn microcredit facilities include soft loans amounting to RM390mn by Bank Simpanan Nasional, RM350mn by Agrobank, and RM295 million by TEKUN.

Initiative #17: Supporting and boosting online businesses

To continue the support for entrepreneurs and businesses in generating income through online sales or e-commerce platforms, the Government will accelerate the implementation of the SME and Micro SME e-Commerce Campaign and Shop Malaysia Online campaign, with a total allocation of RM300mn.

Through these campaigns, micro entrepreneurs will receive business coaching and on-boarding onto e-commerce platforms while buyers will enjoy savings through online shopping.

Initiative #18: Enhancing the Danajamin PRIHATIN Guarantee Scheme

Under the PENJANA package, the Government announced the Danajamin Guarantee Scheme, or SJPD amounting to RM50bn, to support the private sector’s growth and boost the country’s economy. As part of the enhanced measure, the Government will:

1. Increase the maximum financing from RM500mn to RM1bn;
2. Expand the scope of financing to cover working capital with a guarantee period of up to 10 years; and
3. Allow foreign-owned companies operating in Malaysia to also obtain the SJPD guarantee provided that Malaysian employees account for at least 75% of their workforce. The Government hopes that the improved SJPD will help promote growth of the private sector and retain Malaysia’s position as an investment destination of choice.

Initiative #19: Rescheduling and extending the moratorium period for MARA loans and MARA premises rental

For MARA borrowers, MARA will continue its MARA PRIHATIN Peace of Mind 2.0 programme, through which borrowers can apply to reschedule the repayment of MARA education loan facilities, or for business loan moratorium until 31 March 2021. In addition, MARA entrepreneurs affected by COVID-19, the MCO and the floods can apply for the MARA business financing rescheduling programme.

MARA will also provide a 30% rental discount on business premises for a period of six months from November 2020 to April 2021. PM Muhyiddin said: "I would also like to urge other agencies and companies to follow suit in offering loan rescheduling and rental discounts on business premises."

Apart from the above, to alleviate the burden on SMEs, the Government has given a special tax deduction to any company that deducts at least 30% of the rental rate on business premises for SMEs, from 1 April 2020 to 31 March 2021.

Based on current economic conditions, this special deduction will be expanded to cover the rental reduction also given to non-SMEs. This special deduction period will also be extended until 30 June 2021. In addition, the Human Resources Development Fund will exempt the employer levy for companies that are unable to operate during the MCO and CMCO periods.

Initiative #20: Continuing electricity bill discounts

The Government will provide a special discount of 10% on electricity bills from January to March 2021 to six business sectors nationwide, comprising hotel operators, theme parks, convention centres, shopping malls, local airline offices as well as travel and tour agencies.

In addition, electricity rebates will be given to all TNB users, domestic and non-domestic, at a rate of two cents per kilowatt-hour, which is equivalent to a reduction in electricity bills of up to 9% for a period of six months (1 January to 30 June 2021).

Initiative #21: Introducing a bus and taxi hire purchase rehabilitation scheme

Syarikat Jaminan Pembiayaan Perniagaan will introduce a Bus and Taxi Hire Purchase Rehabilitation Scheme. Under this scheme, a 50% guarantee on financing from hire purchase and leasing companies will be provided for selected buses such as sightseeing buses, and taxis.

Through this, bus and taxi operators can restructure their financing and enjoy a 12-month moratorium and lower monthly repayments. A total of RM1bn will be provided for this purpose.

Initiative #22: Extending the temporary measures for reducing the impact of COVID-19 act 2020

In 2020, the Temporary Measures for Reducing the Impact of COVID-19 Act 2020, or Act 829, was enacted to assist individuals and businesses that were economically impacted by the COVID-19 outbreak. This Act came into force on 23 October 2020.

The original effective period covering inability to perform contractual obligations under the Act expired on 31 December 2020. Given the current situation and the MCO announcement, the Government has extended the effective period of inability to perform contractual obligations to 31 March 2021.

This includes hire purchase or lease contracts and credit sales contracts which benefit groups such as the B40, M40 and micro enterprises who are unable to meet their contractual obligations.

Information on the initiatives previously announced under Budget 2021 can be found here. 

Photo / Screenshot of PM Muhyiddin's announcement, National Security Council's Facebook page