EMPLOYERS TO DEDUCT PTPTN BORROWERS’ SALARIES
Loan repayment scheme to begin next month, says chairman
NATIONAL Higher Education Fund Corporation (PTPTN) borrowers earning more than RM2,000 a month will no longer be able to escape repayment once the scheduled salary deduction (PGB) is implemented in January.
The scheme will emulate the Inland Revenue Board’s (IRB) monthly tax deduction (PCB) system, in which PTPTN will be in direct contact with employers, who will be responsible for mandatory salary deductions.
PTPTN chairman Wan Saiful Wan Jan said PTPTN would issue a directive to employers to carry out the deductions according to the percentage set in the PGB scheme.
“PTPTN will work with agencies, among them the IRB, Employees’ Provident Fund (EPF), Retirement Fund Inc (KWAP) and the Immigration Department, to obtain salary information and details of borrowers’ employers.
“Based on the information, PTPTN will issue a directive to employers to deduct salaries according to the percentage set.
“Employers will be responsible for deducting the salaries of their staff (borrowers) for PTPTN loan repayment,” he said at a press conference to announce the new repayment mechanism at Menara PTPTN here yesterday.
In the 2019 Budget, Finance Minister Lim Guan Eng initially announced that the government would implement a scheduled salary deduction scheme of between two and 15 per cent for borrowers earning more than RM1,000 a month.
However, the threshold was later amended to RM2,000, as announced by Deputy Education Minister Teo Nie Ching in Parliament.
Presently, 1.4 million of 2.9 million PTPTN borrowers have not made repayments.
Wan Saiful said employers who help their staff to repay their PTPTN loans via PGB would be entitled to tax relief for the amount paid.
He said the tax relief benefit covers full repayment or monthly repayments.
“This is on the condition that employers do not impose any condition on the staff member after repayment is made.
“Perhaps employers can offer PTPTN loan settlement as an incentive for exemplary staff members or as an incentive in recruiting new employees,” he said.
Earlier, Wan Saiful said 225,000 borrowers earning below RM2,000 a month did not have to make PTPTN repayment until their salary exceeded RM2,000.
The lowest repayment amount is two per cent, which works out to a monthly deduction of RM40 for those earning RM2,000 a month.
He said degree students from the Bottom 40 per cent and Middle 40 per cent income groups, who obtained first class honours and complete their studies next year would qualify for loan repayment exemption.
He said the government had also agreed to waive the loan balance for senior citizens earning between RM2,000 and RM4,000 a month and had been consistent in paying back their loans for three years before they hit 60.