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Govt allocates RM23 billion for Covid-19 fund in 2022, 9% EPF Contribution rate to remain until June 2022


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KUALA LUMPUR, Oct 29 –– A sum of RM23 billion will be allocated for the COVID-19 Fund in 2022 with the bulk of allocation to be provided for cash assistance, social support to vulnerable groups and Wage Subsidy Programme that is carried over from 2021,  said the Ministry of Finance (MoF).

It said 2022 will be the final year for the COVID-19 Fund as it is a temporary fund with a lifespan of three years.

Thus, the total requirement of the fund is estimated to reach around RM100 billion, below the approved ceiling of RM110 billion, MoF said in its 2022 Fiscal Outlook and Federal Government Revenue Estimates report released today.

The ministry said the remaining balance will serve as a buffer for contingencies should the need arise.

READ: EPF i-Citra: How to withdraw RM5,000 and what are the requirements

The fund was established in September 2020 to finance economic stimulus packages and recovery plans in addressing the COVID-19 crisis. A sum of RM38 billion was disbursed to finance programmes listed in the Schedule of the Temporary Measures for Government Financing (Coronavirus Disease 2019 (Covid-19)) Act 2020.

As of end-August 2021, total spending under the fund was RM58.9 billion. The bulk of spending was on the cash transfer programme amounting to RM25 billion, or 42.4 per cent of total outlays. Among others, under the programme, RM18.6 billion was spent in 2020 and January 2021 for Bantuan Prihatin Nasional, benefitting almost 10.6 million recipients with income below RM8,000.

The balance of RM6.4 billion was subsequently disbursed in several phases under Bantuan Prihatin Rakyat, which benefited more than 8.5 million recipients. Similarly, the spending for small-scale projects stood at RM3.7 billion or 6.3 per cent of total outlays.

Besides that, the government also announced that the period to reduce the Employees Provident Fund (EPF) contribution rate from 11 per cent to 9 per cent will be extended until June 2022. The initiative would involve about RM2 billion.

The government understands the financial constraints faced by the people as a result of the protracted Movement Control Order, especially in terms of cash flow management, said Finance Minister Tengku Zafrul when announcing the Budget 2022 earlier today.

FIND OUT: Malaysia’s economy amid Covid-19: What kind of recovery can we expect?

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