Working or retired? Here is what Budget 2027 offers Malaysians over 60

KUALA LUMPUR, Nov 4 — Reaching 60 does not automatically mean clocking out for good, drawing a pension, or qualifying for welfare. Depending on your circumstances, Budget 2027 packs a variety of measures that impact older Malaysians differently.

Whether you are still in the workforce, managing your retirement, or navigating the rising costs of elder care, the latest federal Budget has something for you.

Here is a breakdown of what Malaysians aged 60 and above stand to gain.

Cash aid through STR and SARA

Budget 2027 increases the combined allocation for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) to a massive RM16 billion.

SARA assistance of up to RM150 a month, or RM1,800 a year, will now reach all eligible STR recipients, benefiting up to nine million Malaysians.

Separately, the government will extend a special SARA Madani assistance of RM100, paid twice a year, to eligible adults who do not qualify for STR. Expect these payouts just before Hari Raya Aidilfitri and the 70th Merdeka celebrations, giving recipients a handy RM200 boost.

Higher individual income tax relief and lower rates

For older Malaysians still earning an income, the government plans to increase individual income tax relief from RM9,000 to RM12,000 starting from Year of Assessment 2027. Naturally, this only benefits those with taxable income.

The Budget also cuts one percentage point off individual income tax rates for specific brackets. Chargeable income between RM70,001 and RM100,000 drops from 19 per cent to 18 per cent. Meanwhile, the RM100,001 to RM150,000 tier falls from 25 per cent to 24 per cent.

Put together, these tweaks will leave up to RM1,600 in extra disposable income for roughly five million taxpayers.

Flexible EPF withdrawals under i-Emas

Retirees looking to stretch their savings can tap into the Employees Provident Fund (EPF) i-Emas scheme.

This facility allows members reaching 55 and 60 to opt for monthly withdrawals, letting their remaining balance continue compounding with annual dividends.

Through the scheme, you can schedule monthly payouts of at least RM100 for a minimum of 12 months.

Alternatively, members can mix monthly payments with partial withdrawals instead of cashing out their entire eligible savings in one go.

Expanded tax relief for aged care expenses

Caring for ageing parents and grandparents will get slightly easier on the wallet. From Year of Assessment 2027, tax relief for their care will expand beyond strict healthcare costs to cover all types of care expenses, including home care, day-care, and residential centres.

The existing RM8,000 claim limit remains intact. Crucially, however, you no longer need a registered medical practitioner to verify these claims.

Taxpayers simply need to provide receipts alongside a written declaration from the carer or a copy of the carer’s work permit.

Lower service tax for care centres

Starting Jan 1, 2027, the service tax rate on elderly care services drops from 8 per cent to 6 per cent.

Taking it a step further, the government will completely exempt qualifying elderly care centres from service tax if their annual fees fall below RM96,000 per person.

These centres must be registered under the Care Centres Act 1993 or the Private Aged Healthcare Facilities and Services Act 2018. Any fees exceeding the RM96,000 threshold will attract the reduced 6 per cent rate.

RM1.3 billion for older Malaysians’ welfare

The government is setting aside RM1.3 billion in 2027 to assist nearly 200,000 older Malaysians. Currently, the Social Welfare Department runs the Bantuan Warga Emas (BWE) programme, which provides eligible older Malaysians with RM600 a month.

While the Budget does not explicitly raise this individual monthly payout, the massive RM1.3 billion allocation ensures the continuation of this vital safety net for those meeting the strict citizenship, residency, and financial criteria.

Pension bumps and bonuses for government retirees

Civil service veterans will have plenty to smile about. The minimum monthly pension will jump from RM1,000 to RM1,350, directly benefiting nearly 59,000 pensioners, Armed Forces veterans, and derivative pension recipients.

On top of that, over one million government retirees will receive a special financial assistance payout of RM750.

The government will split this bonus into two instalments, paying out just before Hari Raya Aidilfitri and the 70th Merdeka anniversary.

Faster bankruptcy relief for caregivers

Financial distress can hit families hard, especially those managing heavy caregiving duties. Starting in 2027, the Second Chance Fast Track Policy will expand to include primary caregivers of family members who are aged 60 and above, disabled, or chronically ill.

While not a direct cash handout, this policy expedites bankruptcy relief, offering a critical lifeline to caregivers drowning in debt.

New laws to protect older Malaysians

Looking at the bigger picture of Malaysia’s ageing population, the government plans to draft a new bill to address elderly abandonment and fortify the national care system.

This is a pre-emptive legislative move rather than an immediate financial benefit, signalling a stronger legal framework to protect the welfare of older Malaysians in the years to come.