Monday, 31 December 2012

Cash poor, CPF rich? - Sell HDB, top-up CPF, get cash bonus?

31st December 2012

Cash poor, CPF rich?

Why is it that at the end of the day, practically every scheme that has been introduced to help lower-income Singaporeans retire, makes them more cash poor, but “CPF rich”?

Refer to the article “Silver Housing Bonus and Lease Buyback schemes enhanced” (Channel NewsAsia, Dec 28).

Use your cash to top-up CPF to get cash bonus?

It states that “Two schemes aimed at enabling senior citizens to monetise their flats have been made more attractive following public feedback.

The Silver Housing Bonus, which provides an incentive for lower-income households to move to a smaller flat, will have a lower top-up requirement of S$60,000 per household. When first announced in February this year, the requirement was for all net sale proceeds to be used to top up the CPF Retirement Accounts to the prevailing minimum sum. The S$20,000 bonus seniors get for topping up their Central Provident Fund Retirement Accounts by S$60,000 will be paid in cash; previously S$15,000 was in cash while S$5,000 went to top up the CPF account.

Those whose CPF top-ups from downsizing their homes are less than S$60,000 will receive less cash bonus – S$1 for every S$3 topped up.”

Although there are four examples on how the Silver Housing Bonus (SHB) works in the Ministry of National Development’s press release, let me just for the sake of simplifying matters, use one of the four examples to show the possible implications for lower-income elderly Singaporeans who are being encouraged to opt for this scheme . . . . .

Continue reading this interesting analysis by Leong Sze Hian here

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