THE government will raise the bankruptcy threshold to RM150,000 from RM100,000 from 2027 and widen access to a second chance for financially distressed individuals, while increasing welfare assistance for senior citizens and people with disabilities under Budget 2027.
The government said more than 250,000 Malaysians had been helped to escape bankruptcy since 2023. The expanded Dasar Peluang Kedua Prihatin will cover primary caregivers of family members with disabilities, chronic illness or old age, as well as gig workers and those with irregular incomes.
Automatic discharge under Section 33C of the Insolvency Act, which can take place after three years for eligible individuals, will also be strengthened to accelerate their release from bankruptcy.
To prepare Malaysia for an ageing population, the government will introduce a Senior Citizens Bill to address neglect and strengthen the country's care system.
From Jan 1, 2027, service tax on elderly care services will be reduced from eight per cent to six per cent, with a full exemption for care fees of up to RM96,000 a year.
More than RM40 million will be channelled through HRD Corp to train 8,000 workers for the elderly care sector, while two National Integrated Care Centres of Excellence (NICE) will be established in Penang and Sarawak for training, research and elderly care.
Annual assistance for senior citizens will rise to RM1.3 billion next year, benefiting nearly 200,000 recipients.
Employees Provident Fund members aged 55 and 60 will also be able to opt for the i-Emas scheme, which provides monthly withdrawals while allowing the remaining savings to continue earning dividends.
For people with disabilities, total assistance will increase to RM1.5 billion, benefiting more than 300,000 recipients.
Monthly assistance for the care of bedridden people with disabilities and chronically ill patients will rise from RM500 to RM600. The income threshold for eligibility for the Disabled Workers Allowance will increase from RM1,700 to RM2,000.
The allowance for pupils with special educational needs will rise from RM150 to RM200 a month, benefiting 150,000 pupils, including autistic children. The teaching incentive for special education teachers will also increase from RM250 to RM300 a month, covering 20,000 teachers.
Two new Permata Kurnia centres will be built in Melaka and Pahang to provide education, support and training for autistic children. More than 130 new Tunas Istimewa kindergarten classes will be opened in rural areas to improve early intervention for autistic children from low-income families.
In addition, 15 Community-Based Rehabilitation premises will be upgraded into specialised therapy centres, with the initiative intended to benefit 20,000 registered people with Down syndrome. A further 3,000 caregivers will receive specialised training to strengthen disability care services nationwide.
The Department of Orang Asli Development will receive RM445 million, including funding for replanting in Pos Poi, Sungai Siput, Perak, and the construction of kindergartens in Kampung Angkek and Pos Belatim in Gua Musang, Kelantan.
To reduce the risk of Orang Asli children in Kinta, Perak, dropping out because of long daily journeys to school, the government will build a dedicated hostel with 100 places.
The measures form part of the government's wider effort to strengthen social protection and improve access to care, education and financial rehabilitation for vulnerable groups. - October 9, 2026
