MySalam is a free takaful protection scheme provided by the government for the B40 group. The MySalam Scheme has been operational since 2019 and is open to Malaysian citizens who are recipients of the government’s cash assistance now known as the Rahmah Cash Contribution (STR).
Under this scheme, eligible recipients receive hospitalisation benefits of RM50 per day for a maximum of 14 days or RM700 per year if hospitalised at government, military, or university hospitals.
Additionally, a one-off payment of RM8,000 is provided to confirmed recipients diagnosed with any of the 45 critical illnesses listed under the MySalam Scheme. Furthermore, MySalam recipients are also eligible to claim medical device expenses up to RM30,000 per person, subject to qualification limits.
Deputy Finance Minister Lim Hui Ying told the Dewan Nagara today that in 2024, it is estimated that over 10.92 million Malaysians from the B40 group qualify to benefit from the MySalam Scheme. Based on the breakdown of eligible recipients by state, Selangor recorded the highest number of eligible recipients at 1.48 million, followed by Johor with 1.34 million and Sarawak with 1.13 million. Meanwhile, Kelantan had 825,000 eligible recipients.
“The implementation of the MySalam Scheme has been extended for a period of two (2) years starting from 2024 until the end of 2025, in line with the announcement in the 2024 Budget.
Regarding future implementation of MySalam, the Ministry of Finance, in collaboration with Bank Negara Malaysia, is continuing discussions with licensed takaful operators and insurance underwriters to diversify the offering of protection schemes in the market to meet the needs of the B40 group.
Based on the MySalam Trust Deed, the benefits of this scheme are specifically allocated to the B40 group. Although the government decided to extend the MySalam Scheme to the M40 group in 2019, its implementation was deferred in 2020 due to the COVID-19 pandemic and its disproportionate impact on the B40 group.
The consideration of whether to extend the MySalam Scheme to the M40 group will be deliberated by the MySalam Trustee Board before any decision is made by the government, Lim said in response to a question raised by Dr. Wan Martina Wan Yusoff who requested the Finance Minister to state the number of beneficiaries under the MySalam Scheme by state and whether the government intends to extend this service, given its scheduled end in 2025. She also inquired about the government’s plans to expand the scheme to the M40 group.
Separately, Lim said tax relief is allowed on life insurance premiums or takaful contributions for life insurance policies up to RM3,000 for the purpose of individual income tax calculation.
In addition, tax relief of up to RM3,000 is also allowed for premiums paid on education or medical insurance policies for taxpayers, spouses, or children based on the criteria set.
“Based on the Income Tax Return Form (BNCP) submitted to the Inland Revenue Board of Malaysia (LHDNM), the average number of taxpayers claiming tax relief for life insurance premiums over the past 5 years from the assessment years 2019 to 2023 is approximately 2.14 million annually, resulting in tax savings of RM635 million per year.
“Meanwhile, the average number of taxpayers claiming relief for premiums on education and medical insurance for the same period is approximately 2 million annually, with a total tax savings involved amounting to RM611 million per year.”
Lim said tax relief provided for life and medical insurance encourages individuals to have medical insurance to cover part of the medical costs incurred.
Through the 2023 People’s Budget, the Government has also raised the tax relief limit on individual expenses for medical treatment from RM8,000 to RM10,000. This increase takes into account the rising medical costs over time.
“Therefore, the existing tax relief services are seen as adequate in helping to alleviate the burden on taxpayers paying life insurance premiums or takaful contributions for life insurance policies and also payments for education or medical insurance premiums.
“However, the Government will continuously review and improve the existing tax incentives from time to time in line with economic needs and the environment,” Lim said.
The Deputy Minister was responding to a request made by Datuk Seri Zurainah Musa to state the number of individuals who have enjoyed tax relief for medical and life insurance over the past five years; and the Ministry’s considerations in increasing tax relief incentives for insurance taken by the public due to rising medical costs and non-communicable diseases (NCDs).
