Pre-elderly who made EPF withdrawals during Covid pandemic in danger of living in poverty

(The Sun Daily) – Pre-elderly individuals, or those defined as being between 50 and 64 years of age, who made full and partial withdrawals of their Employees Provident Fund (EPF) savings under previous government schemes such as i-Lestari, i-Citra and i-Sinar, are now in danger of living in poverty.

This is especially so considering that the Statistics Department has predicted the country may soon become an ageing nation, with 15% of the 32 million population being above 60 years by 2030.

Universiti Utara Malaysia economics professor Dr Kuperan Viswanathan, who has 25 years’ experience as a leading natural resource economist, called on the government to examine institutional infrastructures that support the elderly to prevent a future disaster.

“The public and private sectors and NGOs will also have to examine the situation carefully and develop a long-term and sustainable approach and policy to provide services for the elderly.

“Housing and other loans, which are becoming increasingly expensive, will also lead to an increase in homelessness among the elderly in the future. Addressing these factors can help improve the overall well-being and quality of life of the pre-elderly, who will soon be classified as elderly,” he told theSun.

Malaysian Institute of Economic Research head of research Dr Shankaran Nambiar said: “The expected increase in the pre-elderly population who are struggling with their social security may aggravate their substandard living conditions.

“This will force them to withdraw what little they have left in their EPF accounts.”

He said there could be several reasons for the poor living conditions among the pre-elderly. These include financial strain, which could limit their ability to meet necessities like food, housing and other expenses, lack of access to quality healthcare and social isolation, which could lead to depression.

“Due to insufficient savings, the responsibility of looking after the older generation will fall on the younger ones. It is crucial to only utilise the required amount of funds for a satisfactory period of retirement to prevent the risk of inadequate or zero funds. It is vital to consider EPF as a long-term retirement investment rather than a contingency fund,” he said.

Malaysian Coalition on Ageing chairman Cheah Tuck Wing said he had objected to the idea as soon as the proposal for EPF withdrawals was presented by the previous government during the Covid-19 pandemic.

“The policy was unsatisfactory as a solution during a crisis such as Covid-19 or even the massive flooding faced in many states in the country.

“The government then should have utilised emergency funds to assist the less fortunate instead of encouraging individuals to withdraw from their EPF accounts” he said.

Cheah added that the elderly appear to have been overlooked in Budget 2023, which has resulted in frustration and pessimism among advocates for seniors.

“Despite the existence of various proposals and schemes, the lack of political will renders them ineffective.

“Possible solutions like having a targeted universal basic income, targeted cash handouts, subsidies and social assistance from the government should be implemented.

“Prominent economists such as Prof Geoffrey Williams from the Malaysia University of Science and Technology proposed a targeted universal basic income as a possibility considering that Malaysia is still able to implement it,” Cheah said.

Like Kuperan, he called on the government to relook the extent of social assistance for the pre-elderly and elderly so that more relevant plans could be made to provide them with the social security they require.