Malaysia is intensifying its efforts to integrate more senior citizens into the country’s labour force, including extending tax incentives for employers who hire older workers until the end of 2025.
Introduced in 2019, the tax incentive covers workers aged 60 and above and aims to help them gain a stable source of income.
Speaking in the Malaysian parliament, Finance Minister Amir Hamzah bin Azizan said the greater participation of senior workers is socially and economically important, especially as the country faces labour shortages and an ageing population.
“Senior citizens taxpayers can also claim a wide range of individual income tax reliefs covering all aspects of life, including personal and dependent care, medical expenses and treatment, retirement, insurance, and lifestyle such as sports activities,” Amir said.
He added that the government is preparing the National Ageing Blueprint 2025–2045, a long-term strategy designed to address unemployment, education, health, and social security.
Citing data from the Department of Statistics Malaysia (DoSM), Amir noted that 42% of senior citizens live in relative poverty, underscoring the need to strengthen the country’s retirement mechanisms. To address this, the government put forward proposals to reform the Employees Provident Fund (EPF), Malaysia’s compulsory savings and retirement plan for private workers, to ensure sustainable and retirement funds for all citizens.
One key proposal is to restructure the EPF to provide monthly, pension-like withdrawals for contributors. Under this scheme, members’ savings will be divided into two components: a flexible savings portion for ad hoc withdrawals, and an income savings portion for periodic or monthly disbursements after retirement.
Amir stressed that, once approved, the proposal will only apply to future EPF members and that existing members can opt in voluntarily. “The proposal is still under review, and any decision will only be made after comprehensive stakeholder engagement and careful consideration of members’ long-term interests,” he told the New Straits Times.