Malaysia increases the allowance limit for civil servants to encash rest days upon retirement

The MyPPSM amendment increases the maximum limit of rest leaves eligible for encashment from 160 to 180 days.

Through the 2023 Budget, Malaysia has amended the maximum increase in leave compensation (gantian cuti rehat, also known as GCR) from 160 days to 180 days. Following the announcement, the GCR's initial cash award authorisation of 80 days has been amended to 90 days.

The facility of awarding cash in lieu of rest leave (GCR) and early awarding of existing GCR cash awards is provided through the Human Resource Services Circular (MyPPSM), Section PP.1.3.1: Grant of Cash Award in lieu of Rest Leave (GCR) and Section PP.1.3.4: Early Grant of Cash Award in lieu of Rest Leave.

Amendments to the sections need to be made to ensure that the implementation of this GCR grant is orderly and the amendments are as follows:

1.. Amendments to Section PP.1.3.1.: Award of Cash Leave Replacement (GCR)
Amendment to increase the maximum limit of collected GCR from 160 to 180 days.

2. Amendment to Section PP.1.3.3.: Allowance of Substitution of Rest Leave in excess of 180 days to be used as rest leave in the retirement year
Amendment to inform about the authorisation of collected GCR of more than 180 days to be used as rest leave in the retirement year.

3. Section Amendment PP.1.3.4.: Early Grant of Cash Award in lieu of Vacation
Amendment to inform the initial award of cash leave compensation (GCR) to 90 days.

Amendments to the above sections take effect from 1 January 2023. Subject to their acceptance by their respective authorities, these divisions in their entirety extend to all state civil services, statutory authorities, and local authorities.

Frequently asked questions (FAQs)

What is the GCR cash award?

The GCR cash award is cash given to civil servants who are unable to avail their vacation or rest days owing to work responsibilities upon their retirement.

What is an early GCR cash award?

The early GCR cash award is an initiative that allows an officer to redeem the amount of GCR that has been collected into cash while in service, subject to specified conditions.

How is calculation of the early GCR cash award carried out?

1/30 x (real salary + *fixed remuneration) x 90 days. 

*To note:

• (a) Fixed Remuneration of Key Positions
• (b) Entertainment Fixed Remuneration
• (c) Public Service Fixed Remuneration
• (d) Fixed Housing Remuneration

What are the eligibility requirements for the early grant of the GCR cash award?

The conditions that need to be met before applying for the 90-day cash award are as follows:

1. The period of service that can be taken into account shall not be less than 15 years, subject to Regulations 5, 6 and 7, Pension Regulations 1980;
2. Applicant has reached the age of 45 years, as provided in Service Circular Number 13 of 2002: Civil Servant Date of Birth Document;
3. The accumulated amount of rest leaves must be at least 90 days;
4. Free from any criminal proceedings or disciplinary action;
5. Has obtained a certificate from the Head of Department; and
6. The initial award of GCR cash can only be made ONCE throughout the service.

Am I allowed to apply again if the previous application is not approved or rejected?

Yes, if the above conditions have been met.

Am I allowed to make a new application if the 80-day GCR application has been approved?

No. The advance award of GCR cash can only be made ONCE throughout the service.

Am I allowed to apply for an early cash award more/less than 90 days?

No. The amount of the early grant of the GCR award is set at 90 days only.

Will I be paid the GCR amount of 180 days upon retirement even though I have been approved for the initial grant of the GCR cash award of 90 days?

No. The payment of GCR upon retirement is based on the remaining amount of vacation leave that has been collected, limited to a total of 180 days as stated in Section PP.1.3.1: Grant of Cash Award in lieu of Rest Leave (GCR).

How do I apply for an early GCR cash award?

The application for the initial grant of the GCR cash award must be made through the Department Head and submitted to the Pension Division of the Public Service Department (JPA).

The application procedure for the initial grant of GCR cash award is explained through Section PP.1.3.4: Early Grant of Cash Award in lieu of Rest Leave.

Can excess GCR still be converted into leave in the retirement year?

Yes. The procedure for applying for GCR permission to be used as rest leave in the retirement year is explained through Section PP.1.3.3: Authorisation to Substitute Rest Leave Exceeding 180 Days Used as Rest Leave in the Retirement Year.

Can the department impose/set additional conditions other than those stipulated in PP.1.3.4?

Yes, subject to the consideration of the Head of Department to impose additional conditions.

Are officers who choose the EPF Scheme eligible to make an early redemption of the GCR cash award if the prescribed conditions have been met?

Yes, officers who choose the EPF Scheme are also eligible to make early redemption of the GCR cash award if the above conditions have been met. It should be noted that the calculation of GCR for officers who choose the EPF Scheme starts on 1 November 2004.

What is the role and responsibility of the Head of Department in the matter of the initial award of GCR cash?

Head of Department shall—

(a) ensure the collection of GCR made throughout the service period is correct and orderly as required by the section in force;

(b) ensuring evidence of collection of GCR is recorded and verified (signature and date of verification) in the officer's leave statement book throughout the service year;

(c) ensure that the GCR collected should be at least 90 days;

(d) record the approval of the early redemption of the GCR cash award in the Government Service Book (BPK) of the officer as follows:
"The officer has approved the application for the early grant of the GCR cash award on ….. [specify the Department's approval date Malaysian Public Service (JPA)] amounting to RM….”.;

(e) use the GCR Calculation System application that can be downloaded at www.jpapencen.gov.my for the purpose of accurate GCR calculation at the end of the service; and

(f) submit the initial grant application together with a copy of BPK and a certified copy of the Leave Statement to the Pension Division, JPA.

Will the approval of the initial grant of GCR cash award by the Pension Division, JPA be canceled if it is found that the officer does not meet the conditions that have been set/ subjected to criminal proceedings or disciplinary action?

Yes. The Ministry/Department should inform the Pension Division, JPA if it is found that an officer does not meet the conditions that have been set/subjected to criminal proceedings or disciplinary action after obtaining approval from the Pension Division, JPA. The Pension Division, JPA will cancel the approval that has been given and will inform the Ministry/Department regarding the cancellation of the approval.

Are early GCR cash awards tax exempt?

Nope. The initial grant of the GCR cash award received is subject to income tax for the current year's income under the Income Tax Act currently in force.

Is this GCR cash advance award facility extended to all State Civil Services, Statutory Authorities and Local Authorities?

The implementation of the initial award of GCR cash is subject to the acceptance of Section PP.1.3.4 by the respective authorities.

Heads of Departments of the relevant authorities that adopt Section PP.1.3.4 must consider the applications received and make the payment of the initial award of the GCR cash award to their respective officers.

Who will carry out the approval and advance payment of GCR cash awards for State Civil Service, Statutory Authority and Local Authority appointees?

For officers appointed by the state public service, statutory authority and local authority, the approval and early payment of this cash award will be carried out by the state public service, statutory authority and local authority respectively.

Who will carry out the approval and advance payment of GCR cash awards for Federal appointees posted to State Departments/Agencies?

For Federal appointed officers who are posted to State Departments/Agencies, approval will be managed by the Pension Division, JPA while payments will be managed by state departments/agencies using allocations from the Malaysian Ministry of Finance.

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