Authorities have announced plans to raise the cash bonuses of two housing monetisation schemes for the elderly in response to public feedback.
The latest changes to the Silver Housing Bonus (SHB) and Lease Buyback Scheme (LBS) will see households having to put less of their flat’s sale proceeds into their Central Provident Fund (CPF) accounts – a national pension scheme. They will in return receive more cash.
Both schemes target the low-income elderly that have a monthly household income of S$3,000 or less.
The elderly who opt for either the SHB or LBS can monetise their HDB flats by down-sizing or cutting their lease periods respectively.
The SHB offers a cash bonus for those who sell their flats and move to a 3-room or smaller unit.
With the announced changes, the CPF top-up requirement will be reduced to S$60,000. The S$20,000 bonus will also be given fully in cash.
Households were previously required to use all net sale proceeds from their flat to top up their CPF Retirement Accounts up to the prevailing minimum sum. This could add up to as much as S$278,000 per household.
The S$20,000 bonus was also given in the form of S$15,000 cash and a S$5,000 CPF top-up.
The LBS on the other hand helps lower-income elderly persons living in 3-room or smaller HDB flats by allowing them to sell the tail-end lease of their flat back to the government.
Under the changes, the LBS bonus will now be raised from S$10,000 to S$20,000, all in cash, for all households.
Eligibility criteria for the scheme have also been relaxed to include ex-private property owners and those who have enjoyed more than one housing subsidy, amongst others.
Beneficiaries will also now be able to withdraw any excess proceeds in cash after topping up their CPF Retirement Accounts to fixed amounts depending on their age.
Applications for both schemes will open on 1 February 2013.
Eligible households whose first housing transaction took place on or after 17 February 2012 can also apply for the SHB.
National Development Minister 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.”
Source : Channel NewsAsia – 27 Dec 2012