Planning & Budgeting: What Can You Get From Budget 2021?

What Can You Get From Budget 2021?

The government announced Budget 2021 on 6 Nov 2020. With a total expenditure of RM322.54 billion, the most in the country’s history, let’s take a look at what’s in it for Malaysians like you.

Budget basics

Before we get into what you can get from Budget 2021, let’s understand what the federal budget is. Well, just like how you may use a budget to manage your finances, the government comes up with a budget for the country every year. The budget for the year is announced at the end of the previous year, which is why we already know what the government plans to spend for next year.

What’s in it for you?

Budget 2021 is the largest in history because of the Covid-19 pandemic we’re still facing, which has caused hardship for Malaysians not only in terms of health, but also financially. To help us during these tough times, with many of us losing or getting less income, the government will be giving the following assistance: 

Cash aid

• One-off RM500 cash aid for medical frontliners fighting Covid-19
• Bantuan Prihatin Nasional (BPN) & Bantuan Sara Hidup (BSH) to become Bantuan Prihatin Rakyat with the following financial assistance provided:
  • Households earning RM2,500 or less 
    • Up to one child: RM1,200
    • Two or more children: RM1,800
  • Households earning between RM2,501-RM4,000
    •  Up to one child: RM800
    • Two or more children: RM1,200
  • Households earning between RM4,001-RM5,000:
    • Up to one child: RM500
    • Two or more children: RM750
  • Singles earning RM2,500 or less
    • RM350
    • Eligibility age lowered to 21 years from 40 years
• RM50 one-off e-wallet credit for youth aged 18-20 years
• RM600 special assistance for civil servants Grade 56 and below
• RM300 special assistance for government pensioners and veterans without pension

Non-cash assistance

• RM180 each in telecommunications credit for B40 individuals to buy internet or help buy new smartphones (details have not been released)
• RM1.5 billion in free data from telcos
• Laptops to 150,000 students in 500 schools
• Schoolchildren under Supplementary Food Programme will receive milk every day 
• Loans to buy laptops for PTPN students through the BSN MyRinggit-I COMSIS scheme
• RM30 unlimited monthly rail and bus pass (My30) extended to Kuantan and Penang
• RM5 unlimited monthly public transport pass for students from Standard One to Form Six and people with disabilities (OKU) travelling on the Klang Valley Komuter lines, northern sector Komuter, Kuala Lipis and Tumpat inter-city train and Beaufort-Tenom line in Sabah
• RM200 e-rebate to buy made-in-Malaysia energy efficient air conditioners or fridges

Moratorium repayment

• B40 borrowers who have lost their jobs and microentrepreneurs can:
  • Postpone loan repayments for three months, or
  • Pay 50% of loan repayments for six months
• M40 borrowers can apply for loan repayment assistance more easily by just providing banks with self-declaration of loss of income

EPF

• Workers can choose to reduce their EPF contributions to 9% for 12 months from Jan 2021
• Workers who have lost their jobs can withdraw up to RM500 a month for 12 months from Account 1 starting Jan 2021, on top of the same amount which can be taken from Account 2 under the existing i-Lestari programme (EPF to release details by 11 Nov 2020)

SOCSO

• Job search allowance period under Employment Insurance System extended to nine months from six months previously. Under this scheme, workers who have lost their jobs can claim allowances from SOCSO as follows:
  • First month: 80% of previous salary
  • Second-sixth months: 50% of previous salary
  • Seven to ninth months: 30% of previous salary
• Coverage for Employment Injury Scheme extended to new categories of workers including civil servants under contract for service and delivery riders

Tax reliefs

• 1% reduction in income tax for individuals earning RM50,001 to RM70,000 
• RM8,000 tax relief on medical expenses for self, spouse and child for serious diseases, fertility treatment, medical examinations and vaccination 
• RM5,000 tax relief for disabled spouse
• RM3,000 tax relief for saving in Private Retirement Schemes extended until 2025
• RM3,000 tax relief for sports-related spending, printed and electronic newspapers
• RM8,000 tax relief for Skim Simpanan Pendidikan Nasional extended until 2022
• RM1,000 individual tax relief for education to include upskill or self-enhancement courses approved by the Ministry of Human Resources’ Department of Skills Development 
• RM20,000 tax exemption for loss of employment, applicable for each full year of service with the same employer or companies within the same group, for applications sent to Talent Corporation Malaysia Bhd from 1 Jan 2021-31 Dec 2023 

Other Assistance

Insurance

• MySalam insurance expanded to cover the cost of medical devices such as heart stents and prosthetics
• RM50 voucher to buy Perlindungan Tenang insurance products, including life and personal accident insurance
• Withdrawals are now allowed from EPF Account 2 to buy approved life and critical illness insurance plans (details have not been released)

Monthly welfare allowance for vulnerable groups

• RM300 for OKU who cannot work
• RM500 for care of senior citizens and carers of OKU and chronic patients
• RM450 for OKU workers
• RM150 for each child aged seven-18 years and RM200 for children aged six and below, from poor families, up to a maximum of RM1,000 per family 

Home ownership

• Full stamp duty exemption for first-time home buyers for houses up to RM500,000 up to 31 Dec 2025
• Stamp duty exemption for original house buyers of abandoned projects up to 31 Dec 2025
• RM1 billion for 5,000 Rent-to-Own schemes for first-time homebuyers under the 1Malaysia People’s Housing Scheme (PR1MA)
• New affordable housing consisting of 14,000 low-cost housing units under the People’s Housing Programme and 3,000 units of Rumah Mesra Rakyat 

Health

• Pneumococcal immunisation programme for children
• Home treatment programme for Peritoneal Dialysis 
• Cervical cancer screening and subsidies for mammograms for women with high risk of breast cancer

You can read the full Budget 2021 here. Since the Budget was just announced, some details of the assistance to be given have not been released, like when and where you can apply, so do check our blog for updates!