Changes of CPF in 2016

CPF CELING
CPF con­tri­bu­tion ceil­ing will be increased from $5000 to $6000 with effect from 1 Jan 2016. This will help to boost anoth­er $170 from employ­er and $200 from employ­ee for those earn­ing more than $6000 monthly salary and below 55 years old. Though the take-home pay for these employ­ees will reduce by $200, the sav­ings for retire­ment will be boos­ted by these extra sav­ings.

CPF CONTRIBUTION RATE
The CPF con­tri­bu­tion rate for employ­ee 50 years and above will be increased from 1 Janu­ary 2016.

  • Above 50 to 55, employ­er CPF rate will be increased from 16% to 17%, while employ­ee CPF rate will be increased from 19% to 20%;
  • Above 55 to 60, employ­er CPF rate will be increased from 12% to 13%, with no change to the cur­rent employ­ee CPF rate of 13%;
  • Above 60 to 65, employ­er CPF rate will be increased from 8.5% to 9%, with no change to the cur­rent employ­ee CPF rate of 7.5%.

In addi­tion, for CPF mem­bers aged 55 and above from 1 Janu­ary 2016, the first $30,000 from the CPF accounts will earn extra 1% per annum, on top of the cur­rent 1% extra interest on the first $60,000 of their total CPF sav­ings. That is,

 

 

Total CPF bal­ance

Interest Rate
If in Special/Retirement/Medisave Accounts If in Ordin­ary Account
First $30,000 6% 4.5%
Next $30,000 5% 3.5%
Remain­ing bal­ance above $60,000 4% 2.5%

This trans­lates to extra $300 sav­ings per year for the next 10 years before CPF Life pay­out starts at 65. Assum­ing the yearly $300 interest earned goes into the Retire­ment Account which earns 4% interest, this trans­lates to $3,745 after 10 years. With high­er amount in CPF Retire­ment Account, CPF mem­bers can expect high­er pay­out from their CPF Life.

SUPPLEMENTARY RETIREMENT SCHEME
The caps on con­tri­bu­tion to the vol­un­tary retire­ment sav­ings scheme, Sup­ple­ment­ary Retire­ment Scheme (SRS) will be increased from 1 Janu­ary 2016. For Singa­por­ean and Per­man­ent Res­id­ent, the cap will be increased from $12,750 to $15,300. The cap for for­eign­er will be increased from $29,750 to $35,700. This will help to increase the per­son­al income tax sav­ings, as the amount put into SRS will enjoy tax relief. Moreover, retire­ment cash­flow will be improved when SRS money is allowed to be with­drawn without pen­alty from age 62 onwards.

Elderly to use more Medisave to pay for outpatient services

With effect from 1 April 2015, a patient who is aged 65 and above can use up to $200 a year from the Medis­ave sav­ings to pay for the fol­low­ing ser­vices:-
a) Out­pa­tient med­ic­al treat­ment received at des­ig­nated health­care insti­tu­tions, and gen­er­ally cov­ers med­ic­al ser­vices and drugs, tests and invest­ig­a­tions which are neces­sary for dia­gnos­is or treat­ment of a med­ic­al con­di­tion and ordered by a doc­tor.
b) Screen­ing tests that are cur­rently under the Integ­rated Screen­ing Pro­gramme. This includes recom­men­ded screen­ings for selec­ted chron­ic dis­eases and can­cers.
c) To sup­ple­ment oth­er out­pa­tient uses of Medis­ave.  This includes the new $300 lim­it for out­pa­tient scans that was imple­men­ted on 1 Janu­ary 2015, the exist­ing $400 Mediave400 lim­it[1], the vari­ous lim­its for can­cer treat­ment and dia­gnostics, and oth­er out­pa­tient with­draw­al lim­its. In addi­tion, the eld­erly can also use it to pay for the 15% co-pay­ment when using Medis­ave for chron­ic dis­ease treat­ment.

Termed Flexi-Medis­ave, a patient can use up to $200 from his own Medis­ave or tap on his spouse’s Medis­ave, as long as the spouse is also aged 65 and above.

Flexi-Medis­ave can be used for out­pa­tient med­ic­al treat­ment at des­ig­nated health­care insti­tu­tions. These are:
a)    Spe­cial­ist Out­pa­tient Clin­ics (SOCs) at the pub­lic hos­pit­als and nation­al spe­cialty centres;
b)    Poly­clin­ics; and
c)    Med­ic­al GP clin­ics par­ti­cip­at­ing in the Com­munity Health Assist Scheme (CHAS).

[1] Currently, elderly patients can already use the Medisave400 limit for the following expenses:
a)    Outpatient treatment of 15 approved chronic conditions under the Chronic Disease Management Programme (CDMP);
b)    Screening mammograms for women aged 50 and above; and
c)    Vaccinations including Hepatitis B, pneumococcal and flu vaccinations.

 

Focus Group Discussions on enhancement to CPF

CPF Advis­ory Pan­el has just announced a series of Focus Group Dis­cus­sions (FGD) to be con­duc­ted from mid-Novem­ber 2014 to mid-Janu­ary 2015. The dis­cus­sion will be on the fol­low­ing top­ics:-

  1. Min­im­um Sum — how to adjust bey­ond 2015 for future retir­ees
  2. Lump sum with­draw­als at age 65 years — how much should CPF mem­bers be able to with­draw and under what con­di­tions
  3. CPF pay­outs — how could CPF pay­outs be adjus­ted to address cost of liv­ing increases over time
  4. Altern­at­ive invest­ments and annu­it­ies — how to provide more flex­ib­il­ity for CPF mem­bers who are pre­pared to take on more risks.

You can email to cpf_panel@mom.gov.sg to con­trib­ute your ideas on the above top­ics or to sign up for the FGD.  The first 4 FGDs sched­ule to dis­cuss the first 3 top­ics are as fol­lows:-

  •  15 Novem­ber 2014 (Sat­urday) 9.00am to 12.30pm at *SCAPE
  • 22 Novem­ber 2014 (Sat­urday) 9.00am to 12.30pm at *SCAPE
  • 9 Decem­ber 2014 (Tues­day) 6.30pm to 9.30pm at the Nation­al Lib­rary Build­ing
  • 10 Janu­ary 2015 (Sat­urday) 9.00am to 12.30pm (ven­ue to be in town area)

There will be more FGD ses­sions to be announced later.

For more inform­a­tion, please vis­it http://www.cpfpanel.sg