EPF - Death & Incapapacitation Benefit

Losing a loved one is always painful and while nothing can ease that pain and suffering or replace that person, life still goes on whether one likes it or not, and for those left behind to live, money does become a factor.

That is where the Employees Provident Fund (EPF) comes in, not just for the savings the deceased left behind in the retirement fund but also for the goodwill payments made out by the fund for those left behind.

The goodwill payments also extend to those who are incapacitated and are no longer able to work and these payments are not paid out from the member’s savings. The EPF website states: “The Incapacitation and Death Benefits are a goodwill gesture by the EPF, payable to the member/guardian or beneficiary to help lessen the financial burden when the member suffers from incapacitation or in the event of death.

The money comes from EPF investment earnings and not from the member's savings.” It further states that the incapacitation benefit is paid to an EPF member who has lost his job owing to the incapacitation and has made an incapacitation withdrawal.

The incapacitation benefit amount is RM5,000 and will be paid out only once, subject to the member fulfilling the following conditions: he or she is a Malaysian citizen; has not attained the age of 55; has applied for incapacitation withdrawal within 12 months of the termination of service date; the last period of service must have been at least for a period of six continuous months; and the reason for his or her service being terminated must be due to incapability to work and not because of disciplinary action or voluntary resignation.

So if a person is incapacitated at the age of 40, will he be able to withdraw his savings and get this payment? An EPF spokesman told Theantdaily that if the person is no longer able to work, he would be able to withdraw his or her whole EPF savings and be paid an additional RM5,000 on top of that amount as a goodwill payment.

The EPF website states that death benefits are paid to the deceased member's dependant or next-of-kin when the application for a death withdrawal is made subject to consideration by the EPF. The death benefit amount is RM2,500 and will be paid out only once. So, what does “subject to consideration by the EPF” mean? It means fulfilling the conditions to qualify for the benefit.

The conditions to qualify are: one has to be a Malaysian citizen; member has not attained the age of 55 years at the time of death; and application for death withdrawal is made within six months of the date of demise of the member.

On the amount of incapacitation and death benefits paid out, the spokesman said he was unable to provide it offhand. Sometimes the EPF nominees and the next-of-kin would not be the same people but EPF would pay out the death benefits to the dependants or next-of-kin of the deceased member. “We have a process to determine this,” said the spokesman.

These amounts may not seem much, but for grieving families coming to terms with their losses or the loss of the ability to earn a living anymore, these goodwill gestures do go a long way to offer some semblance of comfort.