PRS Youth Incentive FAQs
This incentive refers to a one-off payment of RM1,000 by the Government to qualified individuals that will be used to purchase units in a PRS fund in the PRS account.
Please read on below to find out more details on the PRS Youth Incentive.
What are the eligible criteria for the incentive
To qualify for the PRS Youth Incentive, the following requirements must be met:
- Individuals must be Malaysian nationals
- Individuals may be existing* PPA account holders or new Members
- Individuals must be aged 20 and above but have not yet reached the age of 31 between 2017 – 2018
- Gross contributions reaches RM1,000 during a period of two (2) years from 2017 to 2018 in a single PRS fund of a Provider
* Existing PRS Members who had qualified for the previous RM500 PRS Youth Incentive during the period of 2014 to 2016 will not be eligible to receive the RM1,000 PRS Youth Incentive. If you are an existing or new PRS Member who have yet to benefit from the incentive, you are eligible to receive the RM1,000 PRS Youth Incentive if you contribute a minimum of RM1,000 before you reach the age of 31 years between the period of 2017 to 2018.
How do I apply for the incentive?
You do not have to apply for the incentive. PPA will monitor the eligible accounts and compile a listing of those qualified and notify the Government of the individuals eligible for the incentive. A report is compiled by PPA bi-annually, in order for the pay-out to be made to the qualified individuals.
I have contributed more than RM1,000 in PRS before the year 2014. Am I eligible for the incentive?
The incentive is only applicable for PRS contributions made from the period beginning 2 January 2014 to 31 December 2018. Any contributions made before 2 January 2014 would not be taken into account for the eligibility of the incentive, even if the minimum gross cumulative contribution amounts to M1,000 and above.
I am 50 and wish to contribute on behalf of my 20 year old working son (or daughter). Can I do this?
Yes, you may conduct PRS contributions on behalf of your working son or daughter. However, please note that the PRS account would be opened in the individual name of your son or daughter.
Is it true that PRS Youth Incentive is only open for those without KWSP account?
No, this is not true. The incentive is for all Malaysians between the ages of 20-30 (from 2014 to 2018), regardless of whether the person is with or without EPF.
If I invested RM1,000 and RM10 is charged as PPA fee, will I be eligible for the RM1,000 incentive?
Yes, the gross amount of RM1,000 will be taken.
What documents do I have to produce once I have contributed RM1,000 to my PRS fund?
You are not required to produce any documentation. PPA monitors relevant PRS Funds which meet the eligibility criteria and subsequently notifies the SC and Government at specified periods.
Am I eligible for this incentive every year?
The incentive is a one-off incentive which will only be received once for the entire program between 2014 to 2018 and not once every year.
Can I choose to receive the RM1,000 in the form of cash or by way of cash back?
No, this incentive is meant to purchase units in a PRS fund in the PRS account. The money will be credited to the said PRS fund.
Would the RM1,000 be credited into sub-account A or B? Or would it be distributed to sub-account A or B in a 70:30 proportion?
The RM1,000 incentive will be utilized to purchase units which will be created in sub-account A of the PRS fund.
When will I receive the RM1,000? How will the incentive be transferred to me?
The RM1,000 will be automatically credited into the sub-account A of your qualified PRS Fund. PPA will notify you once the Incentive pay-out has been made into your qualified PRS Fund in the form of units.
How does the incentive work?
A PRS Member contributes to Fund A until Fund A reaches a value of at least RM1,000. Fund A will be identified by PPA. Once the member has met the necessary requirements, PPA will notify the Government to release the incentive to Fund A. PPA will also notify the member once the Incentive pay-out is made into the member qualified PRS Fund in the form of units.
If my fund reaches RM1,000 in the first half of the year, and continues to increase towards the second half of the year, do I get paid twice?
No, this is a one-off payment by the Government.
If I only managed to contribute RM900 as at 31 December 2017, could I just add another RM100 in 2018 to qualify?
Yes. If the contribution to your PRS Fund has not reached a gross value of RM1,000 in 2017, then you can top up the amount in 2018.
Can I choose which PRS fund to invest in with the incentive that I have received?
You may choose the PRS Fund to receive the Incentive by contributing RM1,000 to your preferred fund within a period of 2 years between 2017-2018.
The incentive will be converted into units to be credited into sub-account A of the PRS Fund that was eligible for the incentive in the first place i.e. the PRS Fund which first reached the RM1,000 minimum gross contribution amount cumulatively within 2017-2018.
For members who have several PRS Funds, either with a single PRS Provider or multiple Providers, in the event that multiple Funds received the RM1,000 gross contribution on the same date, the Incentive would be divided equally among these Funds. Otherwise, the Fund that received the RM1,000 gross contribution first, will receive the full RM1,000 incentive.
Please refer below for an example of the PRS Youth Incentive Payout
I have made contribution into 2 funds in 2017 with the same provider, Fund A has RM400 and Fund B has RM600. Would I be eligible to receive the incentive after my switching in 2018?
Yes, you are qualified for the Incentive provided you have: –
(i) Conducted switching to consolidate the amounts previous in Fund A and B to a single PRS Fund; and
(ii) The accumulated amount after switching is RM1,000 (meets the minimum gross contribution amount); and
(iii) You have not turn 31 years of age when you conduct the switching in order to reach the threshold of RM1,000
Would I be eligible to receive the incentive after my transfer?
I have 2 Funds with 2 different Providers. I wish to transfer one Fund from PRS Provider A to another Fund in PRS Provider B. Would I be eligible to receive the Incentive?
No, you will not be eligible to receive the Incentive as the minimum gross contribution amount cannot be achieved via Transfer.
I have existing contributions in Provider A. In 2 March 2017, I contribute RM1,000 into Provider A (Fund 1). On 4 July 2017, I will transfer all my contributions from Provider A to Provider B. Am I still eligible for the incentive?
Yes, you are still eligible for the incentive as transfer was done after the cut-off date of 30 June. As such, units worth RM1,000 will be credited to sub-account A of Fund 1 at Provider A.
PRS allows for pre-retirement withdrawal from Sub-Account B. Will this incentive be available for pre-retirement withdrawal?
As the full RM1,000 will be utilized to purchase units which will then be created in sub-account A, this incentive is therefore not available for pre-retirement withdrawal from sub-account B.
I have existing contribution
I have existing contribution in Provider A. On 2 March 2014, I will contribute RM1,000 into Provider A (Fund 1) . On 4 July 2014, I will withdraw all my holdings from sub-account B of Provider A. Am I still eligible to receive the incentive.
Yes, you are still eligible for the incentive as pre-retirement withdrawal was done after the cut-off date of 30 June. However, kindly be reminded that no pre-retirement withdrawal from sub-account B can be made where the individual has been a Member of that Scheme for less than a year.
My employer contributes monthly to my PRS account as part of my employee benefit. Will I be eligible?
No, only contributions made by an individual are eligible.
My employer contributes to my PRS account on my behalf via salary deduction. Will I be eligible?
Yes, because the contribution comes from your own salary.
Would there be any charges or fees applied on the RM1,000?
The RM1,000 incentive will not be subject to PPA’s annual fee and Provider’s sales charge.
Application of tax relief on the youth incentive
Is the RM1,000 eligible for the annual RM3,000 tax relief for individual contributions made into the PRS?
The one-off incentive of RM1,000 from the Government to qualified contributors is not eligible for the annual RM3,000 tax relief claim as the contribution was not made by the PRS Member in his individual capacity.