Family allowances in Malaysia
Malaysia pays several targeted programmes: STR (Sumbangan Tunai Rahmah) up to RM 3,700/year per poor family (2023 reform), STAR Permata for families with children, and very favourable family taxation. Maternity leave extended to 98 days in 2023 and paternity to 7 days.
STR (formerly BR1M, BSH) up to RM 3,700/year for households ≤ RM 5,000/month, BKM cuti tahunan, KAFA for children in religious schools, 98-day maternity leave (2023 reform) — extended from 60 to 98, 7 statutory paternity days.
STR — Sumbangan Tunai Rahmah
Flagship transfer programme (formerly BR1M, BSH), uprated in 2024:
- Household ≤ RM 2,500/month with children: up to RM 3,700/year (≈ €760)
- Household RM 2,500–5,000/month: up to RM 2,000/year
- Household RM 5,000–10,000/month: up to RM 700/year
- +RM 100 per dependent child (up to 5 children)
- Quarterly payment: January, April, August, November
- ~9 million beneficiaries (~30% of population)
- Run by LHDN (Inland Revenue Board) via direct payment
KAFA + KPM — School subsidies
KPM (Kementerian Pendidikan Malaysia) pays several subsidies:
- KWAPM: RM 150/year for school supplies
- BAB: RM 100/year for school meals (disadvantaged pupils)
- RMT (Rancangan Makanan Tambahan): food programme for 750,000 pupils
- Bantuan Awal Persekolahan: RM 150 back-to-school lump sum
- KAFA (Kelas Al-Quran dan Fardhu Ain): subsidy for religious schools
Maternity Leave Reform (Amendment Act 2022)
Major reform of the Employment Act in force 1 January 2023:
- Maternity leave: extended from 60 days to 98 days (14 weeks)
- Benefit: 100% of average salary, paid by employer
- Applies to all women employees (no salary cap now)
- Mother cannot be dismissed during pregnancy + 90 days after birth
Paternity Leave (2023 reform)
Novelty of the 2023 reform:
- 7 days of statutory paternity leave at 100% of salary
- For the first 5 births
- Condition: legal marriage + 12 months of continuous employment
- To use within 7 days of birth
- Paid by employer
KWSP (EPF) — Account 3 Family
2024 Employees Provident Fund (KWSP) reform:
- Creation of Account 3 (Sejahtera): 10% of contributions withdrawable at any time for family needs
- Withdrawal allowed for: maternity, sick child care, education, marriage
- ~16 million KWSP members affected
Income Tax — Tax Reliefs (Relief for Children)
Tax deductions for dependent children:
- Non-disabled child < 18: RM 2,000/year deduction
- Child ≥ 18 in secondary studies/equivalent: RM 2,000/year
- Child in higher education (university): RM 8,000/year
- Disabled child: RM 6,000/year
- Disabled child in higher education: RM 14,000/year
- Childcare deduction 0–6: RM 3,000/year
- Breastfeeding equipment deduction: RM 1,000 (every 2 years)
PERKESO (SOCSO) — Maternity Allowance
For women insured with SOCSO (Social Security Organisation):
- Maternity Benefit: 100% of average salary for 60 days
- Invalidity Pension: pension for spouse and children if worker becomes disabled
- Dependant’s Benefit: pension for spouse and children < 21 in case of worker’s death
How Illizeo helps on the HR side
Illizeo is not a consulting firm or a paying body. However, our HR layer manages all of an employee’s family variables: family composition (dependent children, ages), supporting documents, event declarations (birth, adoption), leave workflows (maternity, paternity, parental) with key date calculations, and automatic feed to your payroll software.
Official sources
Manage the HR side of family allowances
From birth declarations to parental leave calculation, Illizeo centralises variables and feeds your payroll automatically.
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