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Importance of EPF Essay

In general, the EPF Board may authorize the withdrawal of the sum of money standing to the credit of a member, if it is satisfied that, The member has died, Has attained the age of 55 yrs, Member is physically or mentally incapacitated from engaging in employment or The member not being a Malaysian citizen is about to leave Malaysia with no intention of returning. In partial withdrawal, Ss. 54; EPF Board also may also authorize application to withdraw partial amount standing to the credit of the member; attained the age of 50 yrs, Has purchased or built a house, Has purchased or built a house and has taken a loan made on the security of a charge on the house for its purchase or construction or Requires medical financing.

In Account I, it consists of 60% of all contributions for the purpose of retirement at the age of 55 yrs while in account 2; it consists of 40% of all contributions for housing withdrawal or withdrawal at the age of 50 yrs. Under Current Scheme of Withdrawal, Pre retirement consists Housing withdrawal scheme, Withdrawal upon reaching 50 yrs old and Medical withdrawal. Upon Retirement consists lump sum withdrawal, periodic withdrawal and withdraw a portion of the savings in a lump sum and the balance periodically. In withdrawal to purchase a house, this withdrawal allows you to withdraw your Account 2 savings to finance the purchase of a house.

Withdrawal to purchase a second house is allowed after the first house is sold or disposal of ownership of property has taken place. Disposal of ownership refers to ‘loss of ownership of the first house owned through previous EPF withdrawal’ either due to auction, surrender of property by court order, transfer of ownership because of love and affection, destruction of house due to natural disaster, abandoned housing project or cancellation of purchase.

The application eligibility is either a Malaysian Citizen; OR a Malaysian Citizen who has made Leaving the Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; OR a Non-Malaysian Citizen who: has become an EPF member before 1 August 1998; OR has obtained a Permanent Resident status (PR).

The applicant have not reached 55 years of age at the time the EPF receives
your application; AND have at least RM500.00 of savings in Account 2.

The applicant are eligible to apply if buy or build a residential house (type: bungalow / terrace / semi-detached / apartment / condominium / studio apartment / service apartment / townhouse / SOHO) or a shop lot with residential unit. The purchase is financed through: Housing loan from any of the institutions as follows: Financial Institutions licensed under the Banking and Financial Institutions Act 1989 (BAFIA) Central / State government or any other government financial agencies Member’s employers

Cooperatives / Cooperative Companies with license (approved by Malaysian Cooperative Commission, Ministry of Entrepreneur and Co-operative Development) Licensed insurance companies approved by the Central Bank of Malaysia Loan providers allowed by the EPF

OR
(ii) Cash purchase.

You have signed the Sale and Purchase agreement of not more than three (3) years at the time your application is received by EPF. You have never made a Housing Withdrawal; OR you have made a withdrawal to purchase your first house and have sold the house or disposal of ownership has taken place and subsequently buy a second house.

Proof of sale / disposal of ownership of the first house must be submitted. You intend to buy a house which has been acquired from a rental with a view of purchase agreement from a party authorised by EPF. You have bought a land and built a house on the same land simultaneously (dates of the agreement to purchase the land and the agreement to construct the house must be within 6 months).

You are not eligible to apply if you: Buy a land or a house lot only, Renovate, repair or do additional work to the existing house, Ownership of property is not via sale and purchase transaction, Have taken an overdraft loan, Buy a third house or Buy a house abroad

You can withdraw your savings as follows:
HOUSE PURCHASE OWNED BY INDIVIDUAL
JOINT PURCHASE WITH SPOUSE OR IMMEDIATE FAMILY MEMBER OR OTHER INDIVIDUAL The difference between the house price with the loan amount and an additional 10% of the house price OR
All your savings in Account 2.
(Whichever is lower but not less than RM500.00)
The difference between the house price with the loan amount and an additional 10% of the house price OR
All the savings in each purchaser’s Account 2 subject to the maximum amount eligible for withdrawal. (Whichever is lower but not less than RM500.00)
100% HOUSING LOAN
PURCHASE WITHOUT LOAN / CASH PURCHASE
10% of the house price
OR
All your savings in Account 2.
(Whichever is lower but not less than RM500.00)
House price with an additional 10% of the house price
OR
All your savings in Account 2.
(Whichever is lower but not less than RM500.00)

You may choose to decide on the amount to withdraw from your Account 2, subject to the maximum amount eligible by filling in the desired amount in the Housing Withdrawal Form (KWSP 9C) (AHL).

You may have made a housing withdrawal previously but have cancelled the purchase of the house. In this situation, the withdrawal amount need not be returned. The current eligible amount will be deducted from the amount previously withdrawn subject to the eligible balance (if any).

Failure to Return the Unused Amount for Withdrawal Purpose
If the applicant does not use the withdrawal payment for the purpose of the withdrawal is made, the applicant is considered as has committed an offence and shall, on conviction, be liable to imprisonment for a term not exceeding six months or to a fine not exceeding RM2,000.00 or to both [Section 58A, EPF Act 1991 (Amendment) 2007]. Incorrect or False Declaration or Furnishing False Documents

If the applicant provides incorrect or false declaration or furnishes false documents, the applicant is considered as has committed an offence and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding RM10,000.00 or to both [Section 59, EPF Act 1991 (Amendment) 2007].

Payment in Malaysia
All withdrawal payments will be credited directly into your account subject to the following:

a. You have an account with a panel bank appointed by EPF; AND b. Your account is still active; AND
c. Your bank account is a Savings / Current Account (personal) OR Joint Account for withdrawal amount of more than RM100,000.00. d. Your identification number matches with the bank’s record. e. Payment is made in Ringgit Malaysia (RM).

However, if the payment cannot be credited into member’s bank account due to causes such as bank account is not active or your identification number does not match with the bank’s record, payment will be made via banker’s cheque.

(ii) Remittance of Payment to Foreign Countries  Payment is made via Foreign Bank Draft. Types of currencies are as follows: Foreign currency as per member’s choice stated in the application form subject to the currency is available in EPF’s list for the purpose of payment via Foreign Bank Draft; OR

In US Dollar if the currency stated by the member in the withdrawal form is not available in EPF’s list for the purpose of payment via Foreign Bank Draft

Note:
EPF will make a verification with the member again if the type of currency chosen in the application form is not available in the allowed list or before changing the type of currency to US Dollar.


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