EPF allows Withdrawals for Critical Illness and Fertility Treatments
14 September 2020
The Employees Provident Fund (Amendment) (No. 2) Rules 2020
(“Amendment Rules”) were gazetted on 28 August 2020 and came into operation on 1 September 2020.
The Amendment Rules amend rule 41 of the Employees Provident Fund Rules 1991 (“Principal Rules”), primarily by introducing a new category of withdrawal by a member of the moneys in the account of such member with the employees provident fund (“Fund”) to finance a critical illness treatment or fertility treatment1
received by the member or an approved person.
For the purposes of these new categories of permitted withdrawals, the Amendment Rules define an “approved person” as follows:
- in relation to a critical illness2 treatment, a child3, spouse4, parent5, parent in law or natural siblings of the member of the Fund; and
- in relation to a fertility treatment6, a spouse of the member of the Fund.
The Amendment Rules require any notice of withdrawal for such medical financing submitted to the Employees Provident Fund Board (“Board”) to be supported by any document relating to the critical illness or fertility treatment received by the member of the Fund or approved person. The Board has the discretion to authorise either a partial or full withdrawal of the sum required for the critical illness or fertility treatment, provided that the amount of such withdrawal shall not exceed the sum required for the relevant treatment or the amount in the Account II of the member of the Fund, whichever is lesser.
The Amendment Rules do not allow a member of the Fund to make any withdrawal for such medical financing if the member or approved person has received a full medical financing from either the employer of the member or the employer of the approved person.
The introduction of these categories of medical financing is most welcomed.
Clarification is required as to whether a member of the Fund or an approved person whose medical expenses for the critical illness or fertility treatment have been covered by any sources other than the employer of the member or approved person will be entitled to such withdrawal for medical financing under the Amendment Rules. It is doubtful that such withdrawal will be permitted as section 58A of the Employees’ Provident Fund Act 1991 requires any amount withdrawn under said Act by a member of the Fund to be utilised solely for the purpose for which the withdrawal is authorised and any amount withdrawn that is not utilised to be returned to the Board within six months from the date of withdrawal.
Alert prepared by Melody Ngai (Associate) of Skrine
The withdrawal for fertility treatment was one of the initiatives announced at the 2020 Malaysia Budget to ease the financial burden of those who wish to seek fertility treatments.
A list of critical illnesses covered under the Amendment Rules is set out in the official portal of Employees Provident Fund.
A child means a biological child, step child, or legally adopted child of the member of the Fund or a child under the custody of the member of the Fund in accordance with the Guardianship of Infants Act 1961 as per rule 41(10E) of the Principal Rules.
A spouse means a legally married husband or wife of the member of the Fund as per rule 41(10M) of the Amendment Rules.
A parent means a biological mother or father, a step mother or step father, a legally adoptive mother or adoptive father of the member of the Fund as per rule 41(10M) of the Amendment Rules.
A list of fertility treatments which are allowed under the Amendment Rules is set out in the official portal of the Employees Provident Fund.