Not an easy decision to expand i-Sinar scheme - Johan

KUALA LUMPUR: The agreement to extend the withdrawal of the i-Sinar scheme from Account 1 of the Employees Provident Fund (EPF) to all members whose income is affected was not an easy decision.

Finance Ministry's National Budget Office director Johan Mahmood Merican explained it was made to create a balance between short-term immediate needs and long-term ones after the contributors retire.

"The i-Sinar announcement was one of the good ones by the minister yesterday. Actually, it is not easy for the government to make that decision.

“I have come back to balance the short-term immediate needs of those affected by job losses and the long-term for them to have savings after retirement.

"This is a difficult choice by the government because I think in the end, we really need to try to provide assistance and accommodate those who are really having a difficult time, especially those who have lost their jobs or are facing a huge drop in income to withdraw some money from Account 1.

"But the argument is that they need to contribute back to Account 1 after resuming employment," he said during the Post-Budget Dialogue via Zoom on Friday. Discussions focused on key issues raised by a panel of renowned experts in their respective fields.

Among the panel members were Chief Executive Officer of the Institute for Democracy and Economic Affairs (IDEAS), Tricia Yeoh, Group Chief Economist of Maybank Investment Bank Bhd, Suhaimi Ilias, Vice President of the Malaysian Economic Association (MEA), Dr Jorah Ramlan and Country Director of the World Bank for Malaysia, Firas Raad.

On Thursday, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the withdrawal would benefit eight million contributors compared to the previous two million.

Apart from that, Tengku Zafrul said withdrawals were also increased from RM9,000 to RM10,000 involving an allocation of RM70 billion.

The Employees Provident Fund (EPF) had previously informed that contributors who meet the eligibility criteria for withdrawal of contributions through the i-Sinar program can submit applications starting mid-next month.

Details on the withdrawal of the contribution will be announced early next week.