A client came to me recently, visibly frustrated. Both she and her husband had diligently contributed RM8,000 each into their child’s SSPN account—RM16,000 in total—expecting to claim RM16,000 in tax relief.
Instead, they discovered they could only claim RM8,000 between them.
She looked at me and said: “Why didn’t anyone tell us the rules changed?”
If you’re a parent using SSPN as part of your education savings and tax planning strategy, this post is for you. Let me explain the new landscape and how to navigate it without leaving money on the table.
The Rule Change You Need to Know (YA 2025–2027)
Here’s what changed effective from Year of Assessment 2025:
| Old Rule (YA 2024 and before) | New Rule (YA 2025–2027) |
|---|---|
| Each parent can claim up to RM8,000 | Only one parent per family can claim |
| Household max: RM16,000 | Household max: RM8,000 |
| Parents could split contributions | One parent claims the full relief |
This rule applies regardless of how many children you have. One child or five children—the relief remains capped at RM8,000 per family .
Exception: Divorced parents filing separately are not subject to the “one parent” restriction .
Why This Matters for Your Tax Planning
Let’s run the numbers to understand the impact.
Scenario A (Old Thinking):
- Husband contributes RM8,000
- Wife contributes RM8,000
- Total tax relief claimed: RM16,000
Scenario B (New Reality):
- Husband contributes RM8,000
- Wife contributes RM8,000
- Total tax relief claimable: RM8,000 (by whichever parent has the higher tax bracket)
If both parents contribute, the excess RM8,000 is effectively “wasted” from a tax relief perspective.
The Smarter Strategy: Choose Your Claimant Wisely
Since only one parent can claim the relief, the question becomes: Who should claim it?
The answer is straightforward: the parent with the higher marginal tax rate.
| Tax Bracket | Tax Saved on RM8,000 Relief |
|---|---|
| 26% | RM2,080 |
| 25% | RM2,000 |
| 19% | RM1,520 |
| 11% | RM880 |
| 6% | RM480 |
If one parent is in the 25% bracket and the other is in 11%, claiming through the higher earner saves an additional RM1120 compared to claiming through the lower earner.
What About the Other Parent’s Contribution?
Just because only one parent can claim the tax relief doesn’t mean the other parent shouldn’t contribute. The goal remains to build a substantial education fund.
However, there’s a better approach:
- Primary contributor (higher earner): Contribute up to RM8,000 annually. This ensures you maximise the available tax relief.
- Secondary contributor: Instead of contributing directly to SSPN, consider alternative education savings vehicles—such as unit trusts, ASNB, or diversified investments—to build the remaining portion of your child’s education fund.
This way, you’re not leaving any tax relief on the table while still aggressively saving for education.
The “Net Savings” Trap: One More Thing to Watch
There’s another rule that trips up many parents: the Net Savings calculation.
Your tax relief is based on net savings, not just total deposits . The formula is:
Net Savings = Total Deposits − Total Withdrawals
If you deposit RM8,000 but withdraw RM1,000 for any purpose (other than higher education fees), your net savings drop to RM7,000. You lose RM1,000 of tax relief instantly .
Key exception: Withdrawals specifically for higher education fees (diploma, degree, master, PhD) do not affect your net savings calculation .
My advice: Once you’ve made your RM8,000 contribution, don’t touch it until after you’ve filed your taxes for that year—unless it’s for paying university fees.
Is SSPN Still Worth It?
Absolutely. Despite the rule change, SSPN remains one of the most compelling savings vehicles for Malaysian parents.
The key is to structure your contributions strategically rather than treating it as a “set and forget” account.
Your Action Plan
If you’re a parent planning for your child’s education:
- Review your current SSPN contributions. Are both parents contributing? If so, decide which parent will claim the relief for YA 2025 onward.
- Consolidate if necessary. Consider having the higher-earning parent make the full RM8,000 contribution, while redirecting the other parent’s contribution to alternative education savings vehicles.
- Avoid withdrawals. Unless you’re paying for university fees, keep your contributions intact until after your tax filing.
- Track your net savings. Use the myPTPTN app to monitor your net savings before filing to ensure you’re claiming accurately .
Let’s Talk About Your Education Funding Strategy
The SSPN rule change is a reminder that financial planning isn’t static. What worked last year may not be optimal this year. And with education costs rising faster than general inflation, leaving tax relief on the table—or worse, missing it entirely—can set your savings goals back significantly.
As a Licensed Financial Planner, I help parents navigate exactly these kinds of changes. Whether it’s optimizing your tax strategy, projecting future education costs, or building a diversified education fund that combines SSPN with higher-growth investments, I’m here to help.
Don’t leave your child’s future—or your tax savings—to chance.
👉 Click the button below to schedule a consultation. Just leave your details and I will reach out to you – Let’s review your current strategy and ensure you’re maximising every ringgit.
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Disclaimer: This article is for informational purposes only and does not constitute specific tax or investment advice. Please consult with a licensed financial planner regarding your personal financial situation. Tax rules are subject to change; always verify with LHDN or your tax advisor.
