Covid-19 Exclusives: Desperate Means to Keep B40 Malaysians Afloat in 2021


LIVELIHOOD AND INCOME have been severely affected by the Covid-19 pandemic, with workers and employees experiencing reduced hours or worse, lay-offs and retrenchment. The more susceptible are those in the informal sector, whose income are either reduced or non-existent, especially during periods of lockdown.

Responding to the distress, Budget 2021 has increased the rate of financial assistance, particularly for B40 households and families with children. Disabled persons and workers, as well as the elderly folk and caregivers for the disabled and chronically ill also saw increases in their respective allocation for financial assistance.

Bantuan Sara Hidup (BSH) has been reformulated as Bantuan Prihatin Rakyat (BPR), with higher rates of assistance, and is specifically targeted towards households with children and single individuals with varying levels of monthly household income. Going by the threshold, approximately 45% of Penang’s households will benefit from BPR.1

Also announced in Budget 2021 is the i-Sinar programme, which enables the withdrawal of EPF savings from Account 1. However, this is subject to the conditions that i) the account holder has not been able to contribute for a minimum of two months or ii) has suffered a loss in income of 30% and above. They will be allowed to draw a total of RM10,0002 or 10% of Account 1 savings of up to RM60,0003, to be staggered over six months.

The increased rate of cash handouts and financial assistance, as well as the facility to withdraw EPF savings are aimed at alleviating the pandemic-induced financial burden with hopes of stimulating spending in the economy to move towards economic recovery. However, the feasibility of the EPF withdrawal plan has been questioned since the retirement savings of account holders will be impacted. This may not bode well for their future, especially for B40 earners who may have low savings to begin with.

Its sustainability is called further into question when it was revealed that 42% of EPF account holders have RM5,000 or less in their corresponding Account 1.4 A withdrawal programme proportionate to the amount of available savings may be a more prudent strategy in offering assistance, while safeguarding retirement savings.

1Households with a monthly income of RM5,000 or less will be eligible for BPR. According to the 2019 Household Income and Amenities Survey, 45% of Penang’s households earn below RM5,000 monthly.
2Those with savings of RM100,000 and below in Account 1.
3Those with savings of more than RM100,000 in Account 1.
4Nazari, T. (3rd November, 2020). Tengku Zafrul: 42% Of EPF Contributors Have Less Than RM5K In Account 1, retrieved from

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