Updated: Jun 16, 2020
The Employees Provident Fund (EPF) has launched the Employer Covid-19 Assistance Programme (e-CAP) to support small- and medium-enterprises (SMEs) affected by the pandemic.
e-CAP allows eligible SMEs flexibility to choose to apply for a deferment and restructuring of the employer’s share of EPF contributions for the months of April, May and/or June 2020. The deferred contribution for the respective month of choice can then be settled over a maximum period of three months.
As an example, for SMEs who chooses to apply to defer their April contributions, their restructured payments will start from July 2020 up to a maximum of three months ending September 2020. For those applying for May, the restructured payments for that month will start from August to October 2020 while for those applying for June, their restructured payments will start from September 2020 to November 2020. The e-CAP can be applied via i-Akaun (Employer) from 23rd April onwards.
SMEs that are interested in having their contributions deferred and restructured for two or three months should also take note that they must ensure their application for the previous month is approved before they can submit a new application.
The e-CAP measure complements other Covid-19-related initiatives that have been announced by the EPF to support members, preserve livelihoods and assist businesses, including the reduction of the employee’s share of contributions from 11% to 7%, the i-Lestari Withdrawal facility for members to withdraw savings from Account 2 and the extension of the April 2020 employer’s contribution deadline to the end of the month.
“The stringent but necessary measures that we adopted as a nation to contain the virus have had a severe effect on our country’s economy,” EPF Chief Officer Alizakri Alias said today.
“We can see that SMEs are particularly vulnerable due to cash flow constraints and some are in real danger of not surviving over the next few months. SMEs are the cornerstone of the Malaysian economy contributing around RM522 billion to GDP and provide the largest amount of employment for the domestic labour market.
“SMEs registered with the EPF represent over 99 percent of all our registered employers, hiring about 7.6 million workers. As such, Malaysia cannot afford for SMEs to collapse as this will have far reaching effects; from larger corporations that will face severe supply chain disruptions to individuals whose jobs will be at stake.”
Alizakri expressed hope that the e-CAP would assist affected SMEs to flow back the cash to ensure business continuity and provide jobs for as long as possible.
“To supplement the e-CAP, we are also offering all Malaysian employers an advisory service on all things EPF via our Employer Advisory Services where dedicated officers will discuss and work out customised, needs-based plans to help them fulfil their obligations in light of the current situation,” he added.
To be eligible for e-CAP, SME employers must:
• Have 200 employees or less on payroll
• Ensure that all monthly contribution payments (both employee and employer portions) up to the February 2020 contribution date (January 2020 wage) are in order
• Ensure that the employee’s share of the payment for the contribution months being applied for (April, May or June) has been paid
The EPF also reminded employers who choose to apply for e-CAP that dividends on late payments will still apply though the Fund will consider a waiver or reduction in late payment charges on a case-by-case basis.
“We believe that the pandemic will eventually end, hopefully very soon, and conditions will allow businesses to resume,” Alizakri said.
“Though the mid to long-term economic impact has not been fully quantified, we hope all the measures from the EPF will help in the short-term for individuals and families to cover the basic necessities and businesses to survive. Having said that, we must also remember that members’ EPF savings constitute a vital component of their retirement and ensures their future well-being.
“We want to reassure our members as well as employers that, at the end of the day, the EPF will continue to fulfil our mandate and play our role in finding the best balance between meeting immediate, urgent needs and providing for our members’ future retirement savings.”
Source: The Sun Daily