Lease Buyback Scheme extended to 4-room HDB flat

On 3rd Septem­ber 2014, the Min­istry of Nation­al Devel­op­ment (MND) and the Hous­ing & Devel­op­ment Board (HDB) announced four enhance­ments to the Lease Buy­back Scheme (LBS) with effect from 1 April 2015.
Only house­hold with at least one of the own­er a Singa­por­ean and all own­ers must be at least at CPF Draw-Down Age in order to par­ti­cip­ate in this LBS.

Firstly, the LBS will be exten­ded to 4-room HDB flats. On top of the pro­ceeds the own­ers receive from selling the tail-end lease of their flat to HDB, they will receive a fur­ther $10,000 cash bonus per house­hold if the total CPF top-up is $60,000 or more. If the total CPF top-up is less than $60,000, the house­hold gets a pro-rated bonus of $1 for every $6 CPF top-up.

Secondly, the income ceil­ing for par­ti­cip­at­ing in the LBS will be raised from $3,000 to $10,000 per month. The income ceil­ing for the Sil­ver Hous­ing Bonus (SHB) scheme will be raised from $3,000 to $10,000 cor­res­pond­ingly.

Thirdly, each own­er of a house­hold will only be required to top up his/her CPF RA to half the age-adjus­ted pre­vail­ing CPF Min­im­um Sum (MS), instead of the full age-adjus­ted pre­vail­ing MS cur­rently. There­fore, they will be able to retain more cash upfront from par­ti­cip­at­ing in the LBS. How­ever, for any cash pro­ceeds above $100,000, the own­ers will still be required to top up the excess amount into their respect­ive CPF RAs. How­ever, if you are a sole-own­er of the HDB flat, this rule does not apply to you and you will still be required to top up your CPF RA to the full age-adjus­ted pre­vail­ing CPF MS.

Fourthly, eld­erly house­holds will have the flex­ib­il­ity to choose the length of lease to retain, based on their age and pref­er­ences, instead of hav­ing one stand­ard 30-year lease for all. Those aged 70 to 74 will have the option of a 25-year lease, those aged 75 to 79 will have the option of a 20-year lease, and those aged 80 or older will have the option of a 15-year lease. On the oth­er hand, those who prefer longer leases can choose to retain more than the min­im­um required for their age, in 5-year incre­ments, up to a max­im­um of 35 years. Any uncon­sumed lease will be refun­ded to the owner’s estate. A house­hold must have lived for at least 5 years and have at least 20 years of lease to sell to HDB to be eli­gible for the LBS.

Changes to CPF Contribution Rates from January 2015

Recieved the fol­low­ing sum­mary from CPF Board today on Singa­pore Budget 2014 — Ini­ti­at­ives Related to CPF.

For more details, please refer to resources provided by CPF Board at the end of the art­icle.


Changes to CPF Con­tri­bu­tion Rates

Employ­er con­tri­bu­tion rates to the Medis­ave Account (MA) will be increased for all work­ers to help them save more for health­care needs. Work­ers aged above 50 to 65 will see an addi­tion­al increase in the employ­er con­tri­bu­tion rates to the Spe­cial Account (SA) to help them save more for retire­ment.

Employ­ee con­tri­bu­tion rates to the Ordin­ary Account (OA) will increase for work­ers aged above 50 to 55.

The table below shows these increases in CPF con­tri­bu­tion rates for Singa­pore Cit­izens (SCs), and for Singa­pore Per­man­ent Res­id­ents (SPRs) from their 3rd year of obtain­ing SPR status.

Increases in CPF con­tri­bu­tion rates for SCs and SPRs from Janu­ary 2015

Employee’s age (years) Per­cent­age point increase in CPF con­tri­bu­tion rates (for wages ≥ $750) Alloc­a­tion of increase
Con­tri­bu­tion by employ­er Con­tri­bu­tion by employ­ee Total OA SA MA
50 and below +1% - +1% - - +1%
Above 50 — 55 +2% +0.5% +2.5% +0.5% +1% +1%
Above 55 — 60 +1.5% - +1.5% - +0.5% +1%
Above 60 — 65 +1.5% - +1.5% - +0.5% +1%
Above 65 +1% - +1% - - +1%

Medis­ave con­tri­bu­tion rates for Self-Employed Per­sons (SEPs) with annu­al net trade income of $18,000 and above will be raised by 1%.

The rates in the table below are applic­able to SEPs for annu­al net trade income from 2015.

Con­tri­bu­tion rates applic­able to SEPs from 2015

Annu­al net trade income (from 2015) Age as at 1 Janu­ary of work year
Below 35 years 35 to below 45 years 45 to below 50 years 50 years and above
Above $6,000 to $12,000 4% 4.5% 5% 5.25%
Above $12,000 to $18,000 Phased in* from 4% to 8% Phased in* from 4.5% to 9% Phased in* from 5% to 10% Phased in* from 5.25% to 10.5%
Above $18,000 8%(Maximum $4,800) 9%(Maximum $5,400) 10%(Maximum $6,000) 10.5%(Maximum $6,300)

*Please refer to the CPF web­site for the phased-in rates.
Spe­cial Employ­ment Cred­it and Tem­por­ary Employ­ment Cred­it

To help employ­ers bet­ter cope with the con­tri­bu­tion rate increases in 2015, the Spe­cial Employ­ment Cred­it (SEC) will be enhanced. Employ­ers will in addi­tion receive a new Tem­por­ary Employ­ment Cred­it (TEC).

SEC enhance­ment in 2015
Employ­ers hir­ing Singa­por­ean work­ers aged above 50 earn­ing up to $4,000 a month in 2015 will receive an addi­tion­al off­set of up to 0.5% of wages, mak­ing it a total off­set of up to 8.5%. The cur­rent off­set is up to 8%.
TEC pay­ment in 2015
In 2015, employ­ers will receive a one-year off­set of 0.5% of wages for Singa­por­ean and SPR work­ers, up to the CPF salary ceil­ing of $5,000 per month, based on employ­ees’ incomes paid in 2015. This will help employ­ers cope with the increased Medis­ave con­tri­bu­tion rates.

Find out more:

Singa­pore Budget 2014: Ini­ti­at­ives relat­ing to CPF(more details such as FAQs and con­tact inform­a­tion are avail­able)
Singa­pore Budget 2014: All ini­ti­at­ives
Singa­pore Budget 2014: Full Budget Speech


Source: CPF Mem­bers Email Update from CPF Board, 22 Feb 2014

CPF Minimum Sum increases to $148,000

With effect from 1 July 2013, the CPF Min­im­um Sum will increase from the cur­rent $139,000 to $148,000.  The amount will con­tin­ue to increase every year till 2015, when it reaches $120,000 in 2003 dol­lars. So if assum­ing infla­tion rate of 3% p.a. in 2014 and 2015, the CPF Min­im­um Sum is expec­ted to reach $166,000 in 2015. By 2025, the CPF Min­im­um Sum may increase to $223,000!

The Medis­ave Min­im­um Sum will increase from $38,500 to $40,500. At or after age 55, CPF mem­bers can with­draw their Medis­ave funds in excess of this min­im­um sum. Accord­ingly, the Medis­ave Con­tri­bu­tion Ceil­ing will be increased to $45,500, $5000 above the Medis­ave Min­im­um Sum.

More cash for senior citizens to monetise their HDB flats

There are cur­rently two schemes avail­able for eli­gible Singa­pore Seni­or Cit­izen to unlock cash from thi­er private prop­erty or HDB flat.

  1. Sil­ver Bonus Scheme for eld­erly home own­er (55 years and above) who choose to down­grade from either lar­ger HDB flat or private prop­erty of annu­al value $13,000 or less to a 3-room flat or smal­ler.
  2. Lease Buy­back Scheme which allows eld­erly flat own­er (63 years old and above) to live in his 3-room or smal­ler flat for the next 30 years, but sell the remainder tail end of the 99-year lease back to HDB.

From 1 Feb 2013, a major change to Sil­ver Bonus Scheme will see more cash pro­ceeds to be giv­en to the flat own­er. Pre­vi­ously, all the pro­ceeds from the sale of the flat has to be used to top up the CPF Retire­ment Accounts of the flat own­ers. This usu­ally res­ults in leav­ing the eld­erly flat own­ers with the $20,000 cash bonus giv­en by the gov­ern­ment for down­grad­ing thi­er prop­erty. Under the new scheme, only $60,000 is required for top­ping up the Retire­ment Accounts of the flat own­ers in the house­hold at first. The own­ers can keep the next $100,000 of the net pro­ceeds from the sale of the flat. The excess amount bey­ond $160,000 will then be used to top up the Retire­ment Accounts fur­ther.

Under the Enhanced Lease Buy­back Scheme, which also take effect from 1 Feb 2013, the cash bonus from the gov­ern­ment will increase from $10 000 to $20 000, as long as the top up for the Retire­ment Accounts of the flat own­ers total to $60,000 or more. Oth­er­wise, the cash bonus will be tagged to $1 for every $3 top up. The net pro­ceeds from the sale of lease will be used to top up the less­ees’ Retire­ment Accounts to the amount shown in the fol­low­ing table before up to $100,000 cash can be with­drawn.

Lessee’s Age To Top Up till CPF Retire­ment Account has:
≤70 Pre­vail­ing MS (cur­rently $139,000)
71 – 79 Pre­vail­ing MS — $10,000 (cur­rently $129,000)
≥80 Pre­vail­ing MS — $20,000 (cur­rently $119,000)

Amount in excess of $100,000 will be used to help the less­ees with the low­est Retire­ment Account bal­ance to meet the pre­vail­ing Min­im­um Sum (i.e. $139, 000 cur­rently).

For more details on Sil­ver Bonus Scheme and Enhanced Lease Buy­back Scheme, please vis­it

Minimum Sum Topping-up Scheme from 1 Nov 2012

From 1 Nov 2012, the many dif­fer­ent CPF top-up schemes will be merged to Min­im­um Sum Top­ping-up Scheme (MSTS). This will make the cal­cu­la­tion on how much can be con­trib­uted towards the fam­ily mem­bers’ Spe­cial Account (SA) or Retire­ment Account (RA) easi­er.

Under the MSTS, you can use cash or CPF money to top-up the fam­ily mem­bers’ SA/RA up to the pre­vail­ing CPF Min­im­um Sum, cur­rently at $139,000. The fam­ily mem­bers include par­ents, grand­par­ents, spouse, sib­lings, par­ents-in-law (from 1 Jan 2013) and grand­par­ents-in-law (from 1 Jan 2013). Each qual­i­fy­ing giver can enjoy tax relief of up to $7,000 for cash top-ups to your own CPF and anoth­er $7000 to your fam­ily mem­bers’ accounts. To qual­i­fy for tax relief for cash top-ups for spouse and sib­lings, they must not have income exceed­ing $4,000 in the year pre­ced­ing the year of top-up or they are han­di­capped.

There is a lim­it to the top-up that the recip­i­ent can receive in his CPF SA/RA. For those who are below 55 years old, it is the dif­fer­ence between the pre­vail­ing Min­im­um Sum and the net bal­ances in his SA account, includ­ing the amount with­drawn for invest­ments. For those age 55 and above, the lim­it is the pre­vail­ing Min­im­um Sum and the net bal­ance in his RA account, exclud­ing the interest earn since age 55, Gov­ern­ment grants received and any amount with­drawn.

Employ­er can also claim tax deduc­tion of up to $7000 by top­ping the staff’s CPF RA/SA account, while the staff can claim the equi­val­ent amount of tax relief.

CPF Rate for SMRA remains as 4% till next year

CPF Board has announced that the CPF interest rate for Spe­cial, Medis­ave and Retire­ment accounts (SMRA) will retain the 4% min­im­um interest rate till end of 2013. It is sup­posed to end this year but due to the low interest envir­on­ment now, CPF Board has decided to extend anoth­er year.

CPF SMRA was sup­posed to peg to the 12-month aver­age yield of 10-year Singa­pore Gov­ern­ment Secur­it­ies plus 1 per cent since 1 Jan 2008. If this for­mula was to be use how, the interest rate for SMRA will only be 2.55%!

So good news to all Singa­por­ean.

Simplification of CPF Top-up Schemes

There are cur­rently two chan­nels to top-up your Spe­cial Account (SA) and Retire­ment Account (RA).
They are :-
              a) Vol­un­tary Con­tri­bu­tions (VC) to a member’s Retire­ment Account (RA); and
              b) Top-ups made under the Ordin­ary Account-to-Spe­cial Account (OA-to-SA) Trans­fer scheme.

The above two will be merged into the exist­ing Min­im­um Sum Top­ping Up (MSTU) Scheme. This sim­pli­fic­a­tion will align the top-up lim­it and terms and con­di­tions so that it is less con­fus­ing to the mem­ber.

The New Aligned Top-Up Lim­its
 For top-ups into the SA, mem­bers who are less than 55 years old will be able to receive top-ups up to the pre­vail­ing Min­im­um Sum, minus the sum of their SA cash bal­ance and SA sav­ings which they have used for invest­ment.
  For top-ups into the RA, mem­bers who are 55 years old or older will receive top-ups up to the pre­vail­ing Min­im­um Sum, minus their RA cash bal­ance. The RA cash bal­ance excludes amounts such as interest earned, gov­ern­ment grants received and amounts that mem­bers have with­drawn.

Tax Relief exten­ded to par­ents-in-law and Grand­par­ents-in-law
Any­one who makes a cash top-up to his own CPF account and/or receives a cash top-up from his employ­er will receive up to $7,000 of tax relief, and up to anoth­er $7,000 for cash top-ups to eli­gible fam­ily mem­bers in a cal­en­dar year. Eli­gible fam­ily mem­bers cur­rently refer to par­ents, grand­par­ents, spouses and sib­lings. This will be exten­ded to par­ents-in-law and grand­par­ents-in-law from 1 Janu­ary 2013. For mem­bers who make top-ups to their spouse or sib­lings, they are eli­gible for the tax relief if their spouse or sib­lings have an annu­al income below $4,000 or are han­di­capped.

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