Levy Forfeiture

Levy Forfeiture

Section 25 of the PSMB Act 2001

  1. If an employer does not make any claims against the Fund within such period as may be determined by the Board from the date of its registration with the Corporation or from the date of the last financial assistance or other benefits granted by the Corporation, the employer shall lose his eligibility to receive any financial assistance or other benefits not claimed for the period.
  2. The period of unutilised HRD levy was revised from (5) five years to two (2) years from 1 January 2020 to increase employer investment in skills development.


Employers’ Circular No. 7/2019 Stated that Levy Contributed for Two (2) Years will be Forfeited when: 

  1. No claims were made within Two Years (24 Months).  
  2. After forfeiture, the amount of RM10,000 will remain in the levy balance


*Levy Balance Forfeiture Formula:   Levy Balance 2 years ago – Claims made within 2 years  - Forfeiture amount + Levy Contributed within 2 years  

Example of levy that will be forfeited : 
Forfeiture amount will be based on the amount at 31 Jan 2021 as we want to remain it with RM10,000.00 (RM100,000.00 – RM90,000.00 = RM10,000.00)                                


Example of levy that will not be forfeited : 


However, Levy Balance of less than RM10,000.00 will be exempted from Forfeiture.   

Example of levy that will not be forfeited : 


Determination of Levy Forfeiture Period 
 
Scenario 1: Employer Has Utilized Levy
 
Log in to the eTRiS system. 
Navigate to Application → Levy → Levy Statement → View Levy Statement. 
Identify the most recent successful training claim date reflected in the levy statement. 
The two (2) year forfeiture period is calculated based on the last successful claim date. 
 
Scenario 2: Employer Has Never Utilized Levy
 
For employers who have never submitted any training claim, the two (2) year forfeiture period will be calculated from the levy statement date on which the levy balance first reached RM10,000.00. 
 
Levy Forfeiture Threshold 
 
In accordance with HRD Corp Circular No. 7/2019, employers who do not submit any training claim within a two (2) year period will be deemed ineligible, and any levy balance exceeding RM10,000.00 will be forfeited. 
However, a threshold levy balance of RM10,000.00 will remain in the employer’s levy account upon ineligibility.
 
Employers are therefore strongly encouraged to ensure that at least one (1) training claim is made within the two-year period to maintain eligibility and avoid levy forfeiture.

For your reference, the circular can be accessed here.