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In his National Day Rally 2014 speech on Sunday, Singapore’s Prime Minister Lee Hsien Loong highlighted various upcoming changes in the country’s local Central Provident Fund system (CPF).
Also Read: Still room for improvement with CPF: PM Lee
Speaking at the Institute of Technical Education (ITE) College Central in Ang Mo Kio, PM Lee said he and his government would focus on three areas this year: Giving people full opportunities to achieve their potential, providing more assurance in retirement, and making Singapore a home for all ages.
Part of these changes included the implementation of the new Silver Support scheme which is targeted towards low income elderly Singaporeans.
The scheme will give those elderly Singaporeans with little or no CPF savings an annual bonus from the government. More details about this scheme will be announced later.
The policy is similar to how the government helps low-wage workers supplement their salaries with workfare payments, according to Lee.
In addition, he announced CPF members who are retired, i.e., 65 years or older, will be allowed to withdraw a lump sum from their Minimum Sum savings if needed. However, he warned that there might be a limit to this withdrawal.
“The amount they take out cannot be too excessive,” he said.
“For example, it can be up to 20% of the total that you have and it should be only during retirement, 65 and beyond, not suka-suka any time you feel you need money you run to HDB,” he said.
Adding to the above changes, the Housing and Development Board’s lease buyback scheme, which allows flat owners to sell a part of their home to the government and receive a regular income in return, will be extended to 4-room flat owners.
“This will cover more than half of all flat owners in Singapore,” he said.
An advisory panel to be set up by the Ministry of Manpower will advise on CPF improvements.
PM Lee also announced that the minimum sum for CPF will be raised from $155,000 to $161,000 for people turning 55 from July 2015. He added, however, that he did not see a need for further major increases.