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| EPF Withdrawals To Go Into Members’ Bank Accounts |
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| KUALA LUMPUR: The EPF monthly withdrawal for reducing housing loans will be credited directly into the contributor's personal bank account and not to the lending bank. |
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| Second Finance Minister Tan Sri Nor Mohamed Yakcop said the money could then be used to either help offset the housing loan instalment or for the contributor to afford a bigger or more expensive house. |
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| “It is a simple mechanism. For instance, let’s say your monthly salary is RM2,000, 30% of your EPF contribution will go to Account 2. |
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| Your monthly housing loan repayment is now RM500 and you can use RM138 to offset the housing loan instalment. The RM138 will be credited to your bank account every month. |
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| “In another situation, you are thinking of buying a house, but you can only afford to pay RM400 a month. With RM138 withdrawn monthly from EPF, you can afford to buy a bigger house and pay RM538 monthly,” he said. |
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| He said contributors needed to go to the EPF to apply for the monthly withdrawal only once, and it would directly credit the money to their personal account every month. |
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| “The condition is that the contributors must have a housing loan,” he added. |
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| Nor Mohamed said the RM9.6bil that would be taken away from the EPF to be put into the contributors’ pockets every year was good for consumption-led growth. |
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| On worries that the monthly withdrawal would be subject to abuse like the EPF computer withdrawal scheme that was a flop, he said: “Let them use the money. It is all right. The money is in their pocket. But they must have a housing loan.” |
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| “There are no worries. For the computer scheme in the past, some contributors bought computer slips rather than computers. |
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| “In this case, there is no downside. They cannot cheat. We can check with the bank if they have a housing loan. A person who doesn’t have a housing loan won’t be able to withdraw his savings from Account 2,” he added. |
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| Nor Mohamed was asked to elaborate on the EPF Account 2 withdrawal scheme for monthly housing loan repayments after delivering his keynote address at the Malaysian Newspaper Publishers Association’s seminar titled “Making Sense of The Media Collusion” here yesterday. |
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| Last Friday, Prime Minister Datuk Seri Abdullah Ahmad Badawi, when unveiling Budget 2008, announced that the Government would allow EPF contributors to make monthly withdrawals from their Account 2 balances to pay off their housing loans from Jan 1. |
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| He said the move would benefit five million active EPF contributors. |
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| He said it would also enable them to own better houses and lessen their monthly financial obligations. |
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| Nor Mohamed said if there was a change in the loan status, the bank could let the EPF know about it. |
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| The EPF said it would announce further details on the matter in December. |
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