The SST Divide: Why Some Malaysian Families Pay 6% More for Elderly Care (And What Budget 2026 Must Fix)

Right now, across Malaysia, elderly care centers registered under the Department of Social Welfare (JKM) are writing appeal letters to the government. They’re asking for relief from a tax that’s adding 6% to families’ monthly care costs—a tax that MOH-licensed nursing homes don’t have to charge.

Most Malaysian families have no idea this tax divide even exists.

With Budget 2026 approaching, it’s time families understood exactly what they’re paying for—and why the type of facility license matters more than ever.

The SST Shock: A Tale of Two Licenses

Since July 1, 2025, Malaysia’s expanded Sales and Service Tax (SST) rules created an unexpected divide in elderly care pricing.

Here’s what’s happening:

JKM-Registered Elderly Care Centers (700-1,000+ facilities nationwide)

These facilities—registered under the Care Centres Act 1993 with the Ministry of Women, Family and Community Development—are now required to charge 6% service tax on their services.

Many are currently appealing to the government, arguing that:

• Elderly care is a welfare service, not a commercial service
• Seniors are paying from post-tax retirement savings (already taxed once)
• The additional 6% burden limits quality of life for vulnerable elderly

But appeals take time. Meanwhile, families are paying the extra 6%.

MOH-Licensed Nursing Homes (Only 19 facilities nationwide)

Facilities licensed under the Private Healthcare Facilities and Services Act 1998 by the Ministry of Health are classified as healthcare providers.

Result: Malaysian citizens pay ZERO SST. Completely exempt.

This exemption covers:

• Nursing care and medical services
• Rehabilitation and physiotherapy
• Accommodation and meals
• Pharmaceutical services
• All medical equipment and support

What This Means in Ringgit and Sen

Let me show you the real impact on a typical family:

Scenario: 75-year-old mother requiring moderate nursing care

Option A: JKM-Registered Care Center

• Base monthly fee: RM3,500
• SST at 6%: +RM210/month
• Annual SST cost: RM2,520
• Medical oversight: Visiting doctors (additional charges)
• Total first-year cost: RM42,000 + medical extras + SST = ~RM45,000+

Option B: MOH-Licensed Nursing Home (like BIGTREE)

• Base monthly fee: RM3,750
• SST: RM0 (exempt for Malaysians)
• Medical oversight: Full-time doctors included
• Total first-year cost: RM45,000 all-inclusive

The facility that appears “cheaper” actually costs the same or more—and that’s before you factor in separate medical expenses at JKM centers.

Over 5 years of care, the SST alone at a JKM center adds up to RM12,600.

Why The License Type Determines Tax Treatment

The fundamental difference comes down to how Malaysian law classifies these facilities:

MOH-Licensed = Healthcare Facility

• Must have licensed doctors and nurses on staff
• Subject to Ministry of Health clinical standards
• Regular medical inspections and compliance audits
• Classified as providing “healthcare services” (SST-exempt)

JKM-Registered = Social Welfare Facility

• No requirement for medical staff
• Focused on basic care and accommodation
• Classified as providing “care services” (subject to SST)
• Appeals pending for welfare service exemption

The irony? Families choosing higher medical standards pay less tax.

What Budget 2026 Must Address (This Friday)

Last year’s Budget 2025 allocated RM1 billion for elderly welfare—the largest ever. Senior allowances increased from RM500 to RM600 monthly.

But here’s the problem: that RM600 allowance doesn’t even cover the SST at many JKM-registered centers, let alone the actual care costs.

When PM Anwar tables Budget 2026 on October 10th, Malaysian families need answers to these urgent questions:

1. Will SST Be Waived for All Registered Elderly Care Facilities?

If the government grants JKM centers’ appeals for SST exemption, families save thousands annually. But the uncertainty is unfair—families need clarity now.

What we’re watching for: Clear policy statement on SST treatment for elderly care services, regardless of facility type.

2. Increase the RM8,000 Nursing Home Tax Relief?

Current law allows RM8,000 annual tax relief for parents’ nursing home expenses. But here’s the reality: at RM4,000/month for quality care, this covers just 2 months of the year.

What families need: Increase the relief to RM15,000-20,000 annually, or allow additional deductions specifically for MOH-licensed facilities that provide medical-grade care.

3. Infrastructure Funding for Quality Care Expansion?

Malaysia has 19 MOH-licensed nursing homes for 33 million people. This severe shortage forces families toward JKM-registered centers—many excellent, but now burdened with SST.

What the industry needs: Capital grants and tax incentives for facilities to upgrade to MOH licensing standards.

4. The Caregiver Crisis Funding?

The government promised 50,000 new skilled caregivers by 2030. We currently have a 3,000-caregiver shortage. Without funding for training programs, this remains an empty promise.

The reality check: 58% of Malaysians approaching retirement have less than RM100,000 in EPF savings. You need RM240,000 just to generate RM1,000 monthly for 20 years. Government support isn’t keeping pace with the demographic crisis.

The One Question Every Family Must Ask

Before choosing any nursing home or elderly care center, ask this:

“Are you licensed by the Ministry of Health or registered with JKM?”

Then ask the follow-up:

“Do Malaysian citizens pay SST on your services?”

If they say “JKM-registered” and “Yes, we charge 6% SST”—that’s an extra RM210/month on a RM3,500 bill. Over years of care, this adds up significantly.

If they say “MOH-licensed”—Malaysian citizens pay zero SST. Plus you get full-time medical staff, hospital-grade safety standards, and comprehensive healthcare oversight.

Not all nursing homes are created equal under Malaysian tax law. Your family deserves to know the difference.

What BIGTREE Offers as One of Malaysia’s 19 MOH-Licensed Facilities

At BIGTREE Medicare & Nursing Home, our MOH license means your family benefits from:

✅ Zero SST for Malaysian citizens on all services—potentially saving you RM2,520+ annually
✅ Full-time medical team including family medicine specialists and wound care experts
✅ Advanced rehabilitation equipment including robotic neuro-rehabilitation technology
✅ Dietitian-supervised nutrition with personalized meal planning
✅ Hospital-grade clinical standards within MOH licensed facilities
We don’t just provide care—we provide healthcare. And under Malaysian law, that distinction saves families thousands of ringgit while ensuring medical-grade quality.

The Bottom Line Before Budget 2026

When Budget 2026 is announced, it will reveal whether the government recognizes elderly care as the national priority it must become.

Will JKM-registered centers get SST relief? Will families receive tax deductions for professional nursing care? Will Malaysia finally invest in the infrastructure and caregivers we desperately need?

What won’t change regardless of the budget announcement:

The SST exemption for Malaysian citizens at MOH-licensed healthcare facilities is law. Right now. Today.

If your family is comparing elderly care options, this tax difference alone could save you over RM12,000 across five years of care—while guaranteeing access to licensed doctors, nurses, and hospital-grade medical standards.

Your parents worked their entire lives. They deserve care that honors their dignity without taxing their retirement savings twice.

Schedule a complimentary consultation to discuss your family’s elderly care needs and understand the MOH-licensed difference.

📞 Call: +6012 685 5103
🌐 Visit: www.bigtree.care
📍 Location: 1, Jalan Pinggiran Kota Laksamana, Pusat Perniagaan Kota Laksamana Jaya, 75200 Melaka

Disclaimer: This article provides information on current SST regulations and Budget 2026 expectations as of October 2025. Tax policies are subject to change. Consult qualified tax and healthcare professionals for advice specific to your family’s situation. BIGTREE Medicare & Nursing Home is licensed by the Ministry of Health Malaysia under the Private Healthcare Facilities and Services Act 1998.