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Cuepacs appeals for three-month deferment on civil servants' home loans

CORONAVIRUS | The Congress of Unions of Employees in the Public and Civil Services (Cuepacs) wants the government to offer a three-month deferment on housing loans taken by civil servants via the Public Sector Home Financing Board (LPPSA).

This comes as a statement by LPPSA yesterday stated that there would be no deferment on the monthly housing loan payment.

Cuepacs president Adnan Mat (photo) said they were disappointed with LPPSA for not considering a need for a moratorium due to Covid-19 and movement control order (MCO), which had also affected the civil servants nationwide.

“LPPSA said they decided not to offer moratorium as civil servants continued to get their monthly pay cheques and pensions.

“This is not fair, the LPPSA cannot assume all civil servants have working spouses.

“Some are housewives, self-employed such as small traders and those working in the private sector,” he said in a statement yesterday.

He said Cuepacs is appealing for a three-month deferment period between April and June and that it could be offered as an option for those who were in need.

“The Covid-19 pandemic has affected the daily routines and household incomes of many civil servants.

“We hope this could alleviate their financial strain so they will have additional money to use during this emergency period,” he said.

Adnan said for some civil servants, their take-home pay stood at 20 percent after deductions including for home loan and other loan repayments.

On Saturday, Adnan called for the government and LPPSA to allow a similar measure to be taken for the benefit of civil servants, in line with the six-month deferment of loan repayments adopted by financial institutions to alleviate the burden on borrowers following the Covid-19 outbreak and the subsequent MCO.

However, LPPSA yesterday said it decided not to offer any moratorium as the welfare of civil servants was sufficiently taken care of.

It said any moratorium or delay in financing the monthly instalment would affect LPPSA’s cash flow and result in additional loans of more than RM2 billion.

It said LPPSA was responsible for ensuring its financial viability and resources remained intact so it can continue to serve existing and future civil servants.

The government has subsidised the LPPSA at a four percent interest rate, which is lower than the rate offered by any banking institution.

“The four percent interest rate is significantly lower than the cost of the fund received by LPPSA through sukuk issuance of 4.5 per cent to five percent,” it said. - Bernama


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