Supporting retirement adequacy

by | March 4, 2020

Two Ministers’ speeches share the CPF-related schemes, and enhancements to housing.

CPF-related highlights were shared during two recent Committee speeches by two ministers. Manpower Minister Josephine Teo during her speech at the Ministry for Manpower Committee of Supply 2020 shared about the Matched Retirement Savings Scheme (MRSS), which will be introduced from 2021 to 2025 to help lower-income seniors, and in particular, gig workers and ‘unpaid’ caregivers, who have less in their CPF.

The Government will match cash top-ups made to the Retirement Account of eligible members, up to S$600 annually, or S$3,000 over five years. About 435,000 Singaporeans will be eligible for MRSS each year. The Manpower Minister shared that there are no restrictions on who can contribute. For example, employers may want to use MRSS as a staff benefit to recognise long-serving senior workers and help them set aside more for retirement and they will enjoy tax reliefs for cash top-ups. Working adults can also make top-ups to their stay-at-home spouses, or their parents who are nearing retirement.

She also shared about the Silver Support Scheme (SSS), which targets seniors who had lower-incomes throughout their lives and have less in their retirement. Since 2016, close to S$1.6 billion has been dispersed to over 200,000 seniors. From January 1, 2021, the SSS will be enhanced as follows:

  • Increase the quarterly payouts by 20 percent for all flat types.
  • Expand criteria for lifetime wages (proxied by total CPF contributions by age 55) from S$70,000 to S$140,000.
  • Expand the criteria for household monthly income per person from S$1,100 to S$1,800, with two tiers of payouts.

Minister Teo said in her speech, “With these enhancements, close to 250,000 Singaporeans aged 65 and above will benefit in 2021. This is about 100,000 more than today. Total Silver Support payouts will almost double from S$330 million currently to about S$620 million in 2021.”

There is no need to apply for Silver Support. The CPF Board will automatically assess all Singaporeans aged 65 and above in 2021. Eligible seniors will be notified by the Board, and receive their enhanced payouts in December 2020.

At Minister for National Development (MND) Lawrence Wong’s speech during the FY2020 Committee of Supply Debate in Parliament, he shared about the enhancements to the Silver Housing Bonus (SHB) and the Lease Buyback Scheme (LBS). SHB was introduced to help elderly households supplement their retirement income when they right-size from a larger flat into a smaller one. Currently, seniors can qualify for the SHB when they top-up their CPF Retirement Account (RA) with part of the proceeds unlocked from right-sizing.

The amount of top-up required depends on the amount of proceeds unlocked. After making a first top-up of S$60,000, seniors may be required to make a second top-up, depending on their remaining proceeds and RA balances. To qualify, seniors also have to be selling a larger flat and buying a three-room or smaller flat. The SHB will be simplified and enhanced. Seniors will only be required to top-up S$60,000 of their proceeds to their CPF RA to qualify. There will be no second top-up required. The requirement that they must be selling a larger flat will also be removed. Seniors can now qualify as long as they buy a three-room or smaller flat, and they have proceeds from the move.

To better support seniors in their retirement, the SHB will be increased to S$30,000, up from S$20,000 today. This means that seniors will now receive a cash bonus of S$1 for every S$2 topped up to their CPF RA, instead of S$1 for every S$3 cash top-up.

In terms of the LBS, the maximum LBS bonus will also be increased to S$30,000 to align with the revised SHB. Currently, owners of three-room or smaller flats, four-room flats, and five-room or larger flats can get a maximum cash bonus of S$20,000, S$10,000, and S$5,000 per household, respectively. The maximum bonus quantum will be increased by 50 percent to S$30,000, S$15,000 and S$7,500 respectively. The enhancements to the SHB and LBS have taken effect from March 4. Those who have applied for either scheme but have not yet received their bonus will also benefit, and can expect to receive the enhanced bonus from April 1 onwards.

According to a joint MND and Housing Development Board (HDB) press release, MND and the Ministry of Health (MOH) have been studying the concept of assisted living, where housing is integrated with care services. Last year, a series of focus group discussions was conducted to gather feedback from seniors and service providers.

With positive feedback on the assisted living concept, HDB will proceed to launch the new flat typology in Bukit Batok in May 2020. This typology will come with a service package to support seniors to age-in-place. The block will be designed with large communal spaces on every floor, so that residents can gather with their neighbours conveniently. The flats, sized at about 32 sqm, will be enhanced with senior-friendly fittings and larger bathrooms, and other features to accommodate those with mobility needs. More details such as the service offerings, sales conditions, indicative flat prices and payment options will be shared in the coming weeks, said the press release.







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