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.

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