Singapore to boost CareShield Life payouts, $570mn set aside to cushion premium hikes

From 2026, CareShield Life payouts will grow faster to match rising care costs. The Government will channel over $570mn in additional support with the aim to ensure premiums remain manageable, and no one loses coverage.

On 27 August 2025, the Ministry of Health (MOH) announced that the Government has accepted in full the CareShield Life Council’s recommendations for the CareShield Life 2025 Review.

The Council had proposed higher payouts together with substantial Government support to cushion the resulting premium increases. To help policyholders manage these increases, the Government will provide more than S$570mn in additional premium support over the next five years. Importantly, all premiums will remain fully payable through MediSave, and no one will lose coverage because they cannot afford premiums.

These changes aim to ensure CareShield Life continues to support Singaporeans with basic long-term care needs if they develop severe disability. The revised scheme will be implemented progressively from January 2026.

Why this matters: keeping long-term care affordable

Long-term care costs are rising, driven by evolving care needs, inflation, manpower, and technology costs. To help keep care affordable, the Government announced a series of subsidy and grant enhancements at Budget 2025.

These will take effect progressively from 2026:

• From July 2026: Enhancements to long-term care service subsidies
  
  • Subsidies will be raised by up to 15 percentage points, bringing the maximum subsidy to 80%.
  • Additional cohort subsidies of 5 percentage points will be introduced for residential long-term care, and 15 percentage points for home and community care.
  • The per capita household income (PCHI) threshold for subsidies will be raised from S$3,600 to S$4,800, benefiting more households.

• From April 2026: Higher home caregiving grant payouts
  • The monthly payout will rise to up to S$600, an increase from the current S$400.
  • The PCHI eligibility threshold will be raised from S$3,600 to S$4,800.

• From January 2026: Expanded support under the Seniors’ Mobility and Enabling Fund
  • The list of home healthcare items covered will be expanded.
  • The PCHI threshold will increase from S$2,600 to S$4,800.

Beyond these subsidies and grants, the Government highlighted the role of CareShield Life, the national long-term care insurance scheme, in ensuring continued affordability. MOH had tasked the CareShield Life Council to review the scheme earlier this year, with recommendations released on 27 August 2025.

Council’s recommendations: larger payouts, premium changes, improved access

The CareShield Life Council conducted thorough public, stakeholder, and expert engagement to assess how best to refine the scheme. Its key recommendations include:

• Doubling the growth rate of payouts: The annual payout growth rate will rise from 2% to 4%. This means a policyholder making a claim in 2030 will receive $806 per month, an increase from $731.

• Premium adjustments:
  • Reinstating underwriting for older individuals: Adjusting the scheme’s underwriting for those born in 1979 and earlier, as originally planned. This follows a grace period of more than four years that allowed those with mild to moderate disabilities to enrol. Sign-up rates among that cohort have dropped by 90%. Resuming underwriting will help moderate premium increases and maintain fairness and sustainability.
  • Introducing transitional premium support: This measure would phase in premium increases over time for all policyholders.

• Streamlining the claims process: In response to stakeholder feedback, the Council noted the need to make disability assessments more accessible and to simplify applications for disability schemes, including CareShield Life. It recommended steps to ease the administrative load on long-term care recipients and their caregivers, while also improving the claims experience for policyholders.

Government support in detail:

The Government has accepted the CareShield Life Council’s recommendations in full, reaffirming the scheme’s focus on supporting Singaporeans with severe disabilities. Those who require long-term care for milder levels of disability will continue to receive help through existing subsidies and grants and may also opt to purchase supplements offered by private insurers.

To cushion the impact of higher premiums, the Government will provide more than $570mn in additional support over the next five years. This package, which builds on existing subsidies, includes:

• $440mn in broad-based transitional support: To moderate premium increases for all policyholders and phase them in gradually between 2026 and 2030.
  
• Over $130mn in means-tested subsidies: For Low- to middle- income Singaporeans, offsetting higher premiums by up to 30%.
  
• Expanded eligibility for additional premium support: For those unable to afford their premiums even after subsidies and limited family help. Eligible policyholders will be invited to apply.

Without these measures, annual premiums would have risen by an average of $126 in 2026, followed by a 4% yearly increase. With the additional support, average annual increases will instead be kept to about $38, and no more than $75. Low- to middle-income Singaporeans will face even smaller rises, and no one will lose coverage because of inability to pay.

The enhanced payouts and premiums will apply from 2026 to 2030, after which they will be reviewed to ensure they remain meaningful and sustainable.

At the same time, the Government will streamline processes to make claims more convenient. From 2026, residents undergoing a severe disability assessment for CareShield Life will also be assessed for other long-term care schemes such as the Home Caregiving Grant. If they qualify, support will be extended automatically without the need for additional applications.

The Government thanked the CareShield Life Council for its work, noting that the recommendations strike a balance between giving Singaporeans greater protection against severe disability and keeping premiums affordable for all policyholders.

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Lead image / Ministry of Health Facebook