Elderly Singaporeans need to top up less of their net sale proceeds and will get more in cash when they participate in the Silver Housing Bonus (SHB) and Enhanced Lease Buyback Scheme (LBS). The Government has enhanced both schemes in response to public feedback. The new schemes will be implemented from 1 February 2013.
2Minister for National Development Mr Khaw Boon Wan said, “We need to strike a balance between improving retirement adequacy by requiring a meaningful top-up to the CPF, and keeping the schemes attractive by allowing adequate cash proceeds. We received several good suggestions from the public on how such a balance could be better achieved. We believe the enhancements will enable more Singaporeans to take advantage of the schemes.”
3The Government has made the SHB more attractive, by lowering the top-up requirement to $60,000 per household (subject to a $100,000 cap on cash proceeds for those who have not achieved the prevailing Minimum Sum (MS)). Furthermore, the $20,000 bonus will now be given fully in cash.
4The SHB provides additional help to lower-income elderly households who right-size (for example, after their children have moved out to their own homes) from a larger flat to a smaller flat, and use their net sale proceeds (footnote 1) to enhance their retirement income.
5When the SHB was first announced at Budget 2012, elderly households were required to use all net sale proceeds to top up their CPF Retirement Accounts (RA) up to the prevailing MS, which could amount to as much as $278,000 (footnote 2) on a household basis. The Government would give a $20,000 bonus to the household – $15,000 cash and $5,000 CPF top-up.
6With the changes, most elderly households who right-size to a smaller flat would now be able to top up their RA with $60,000 and receive the full $20,000 cash bonus. Those who right-size to a Studio Apartment should generally be able to retain $100,000 of proceeds in cash after the top-up.
7An eligible elderly household can qualify for the SHB of $20,000 in cash if lessees use their net sale proceeds to top up their CPF RAs. The amount to top up will depend on the amount of net sale proceeds:
a) If the net sale proceeds is between $60,000 and $160,000, it will need to use $60,000 to top up any lessee’s RA (footnote 3).The household will be able to retain the remaining proceeds of up to $100,000 in cash.
b) If the net sale proceeds is above $160,000, it will need to use $60,000 to top up any lessee’s RA. The household will be able to retain proceeds of $100,000 in cash. The remaining proceeds will be used to further help the lessee with the lowest RA balance meet the prevailing MS.
8Households who are unable to top up the full $60,000 into their RA, because their net sale proceeds is below $60,000 or they would exceed the prevailing MS if they do so, will receive a $1 cash bonus for every $3 they could top up.
9Lessees in the SHB household will use their full RA savings to buy a CPF LIFE plan if they have at least $40,000 (if below age 65) or $60,000 (if aged 65 to 79) in their RA after the top-up (footnote 4) .
The eligibility criteria for the SHB scheme are summarised in Annex A
11The Government will also be making further enhancements to the Lease Buyback Scheme. The LBS helps lower-income elderly living in 3-room or smaller HDB flats by allowing them to sell the tail-end lease of their flat to the Government to enhance their retirement income. The enhancements to the LBS are:
a) Lower top-up requirement. Currently, all net proceeds, except for a maximum of $5,000 lump sum cash, are used to purchase an Immediate Annuity with CPF Board. All lessees will now use their net proceeds Net LBS proceeds (footnote 5) to top up their RAs to the specified top-up requirements shown in the table below. Households can keep up to $100,000 of net proceeds in cash. Net proceeds in excess of $100,000 will be used to help the lessee with the lowest RA balance meet the prevailing MS.
Top-up Requirements under Enhanced LBS
To top up till RA has:
Prevailing MS (currently $139,000)
71 - 79
Prevailing MS - $10,000 (currently $129,000)
Prevailing MS - $20,000 (currently $119,000)
The household will receive the full bonus so long as the total top-up to its lessees’ RAs is $60,000 or more. Households who are unable to do so will receive a bonus pro-rated on a 1:3 basis (i.e. $1 bonus for every $3 top-up). LBS lessees will use their full RA savings to buy a CPF LIFE plan if they have at least $40,000 (if below age 65) or $60,000 (if aged 65 to 79) in their RA after the top-up. (footnote 6)
b) Relax the eligibility criteria to allow more elderly to qualify. Households who have enjoyed more than one housing subsidy and ex-private property owners will now be eligible. In addition, those with more than $5,000 in outstanding loan will no longer need to have a minimum amount of net proceeds to qualify.
c) Increase the LBS bonus from $10,000 (footnote 7) to $20,000 for all households. The bonus will be given fully in cash.
The eligibility criteria for the Enhanced LBS are summarised in Annex B
13Applications for the SHB and Enhanced LBS will be available from 1 February 2013.
Silver Housing Bonus
14To qualify for the SHB, eligible elderly households must either book a new HDB flat or Studio Apartment, or apply to buy a resale flat:
a) before selling their existing property; or
b) within 6 months of completing the sale of their existing property.
15Eligible elderly whose first housing transaction took place on or after 17 February 2012 can apply for the SHB. Interested elderly may obtain and submit the application form at HDB and CPF Board from 1 February 2013.
Enhanced Lease Buyback Scheme
16Applicants can submit an online application for the Enhanced LBS via the HDB InfoWeb, using their SingPass, from 1 February 2013. Applicants who need help completing the application may approach any HDB Branch for assistance.
17The LBS will continue to be available to interested applicants under existing terms until 31 January 2013. Eligible elderly households with pending LBS applications submitted on or after 17 February 2012 can opt for the Enhanced LBS by submitting a fresh application from 1 February 2013.
18For further information and enquiries on the SHB and Enhanced LBS, the public can call the toll-free hotline 1800-555 6363 between 8.00am and 5.00pm from Mondays to Fridays.
1 When elderly households sell their larger HDB flat to buy a 3-room or smaller HDB flat or Studio Apartment, they will typically have some net sale proceeds. Net sale proceeds refer to monies that are left from the sale of the existing flat, after repaying outstanding housing loan, making mandatory CPF refunds, paying for the smaller flat and deducting expenses incurred for the housing transactions.
2 Computed based on a household with two lessees and assuming both have zero RA savings before right-sizing and taking up the SHB. Each lessee would have been required to top up his RA up to the prevailing MS of $139,000 (applicable between 1 July 2012 and 30 June 2013), i.e. the household would need to top up two times $139,000, amounting to $278,000.
3 Lessees can decide how to split the $60,000 top-up across their CPF RAs.
4 Those aged 80 and above are not eligible to join CPF LIFE.
5 Net LBS proceeds refer to proceeds unlocked from HDB’s purchase of the tail-end lease of the flat, less outstanding loan and deductibles incurred during the transaction.
6 Those aged 80 and above are not eligible to join CPF LIFE.
7 $5,000 if the household previously owned a 4-room or bigger flat.