More cash for elderly downsizing flat or
selling lease
By DARYL CHIN
ELDERLY Singaporeans can now get as much as $100,000 in cash,
plus up to $20,000 in cash bonuses, if they downgrade to a smaller
home or sell the tail end of their Housing Board (HDB) flat lease
back to the Government.
The hope is that these payouts will entice more
low-income flat owners here to unlock the value of their homes in
old age and be better funded for retirement.
The Ministry of National Development (MND)
announced these changes to its Silver Housing Bonus and Lease
Buyback Scheme yesterday.
Both schemes are targeted at the lower-income
elderly, whom some commentators have termed "asset-rich,
cash-poor".
Often, they own the flats they live in, but lack
family and financial support, and need more cash to cope with daily
expenses.
The Silver Housing Bonus is a new scheme announced
in February. It aims to give a $20,000 bonus to elderly home owners
who may no longer need a large flat, and choose to downsize.
However, before the scheme was even implemented, it
was met with scepticism because rules dictated that to get the
bonus, the net proceeds unlocked from the sale of a flat had to be
used to top up the CPF Retirement Accounts of flat owners.
Because the top-up had to be sufficient to cover
the CPF prevailing Minimum Sum, which currently amounts to $139,000
per person, or about $278,000 per couple, most flat owners would
receive very little cash from the downsizing exercise. This, in
turn, meant that the "Silver Bonus" of $20,000 was not a strong
enough draw, said critics.
MND said yesterday that after receiving public
feedback, it had decided that flat owners should need to top up
only $60,000 into their Retirement Accounts per household, and be
able to keep the next $100,000 of the net proceeds from the flat
sale.
Any proceeds in excess of $160,000 will be used to
top up CPF Retirement Accounts.
Yesterday, the Lease Buyback Scheme, implemented in
2009, was also made more accessible.
Under this scheme, elderly flat owners get to live
in their homes for the next 30 years, but sell the remainder of
their 99-year lease back to HDB. It has not been popular so far,
with 466 households opting for it to date.
Previously, all net proceeds from the sale of the
remaining lease - save for $5,000 in cash - went into the
compulsory purchase of a CPF annuity.
Again, critics said this was not enough of a carrot
for flat owners to take up the scheme.
MND said yesterday it has decided to allow flat
owners to keep up to $100,000 of the proceeds in cash, so long as
the specified top-up requirement in lessees' Retirement Accounts
has been met.
The cash bonus for households has also been doubled
- up to $20,000 - and eligibility rules relaxed so that former
private property owners and those who have enjoyed more than one
housing subsidy can also apply.
"We need to strike a balance between improving
retirement adequacy by requiring a meaningful top-up to the CPF,
and keeping schemes attractive by allowing adequate cash proceeds,"
National Development Minister Khaw Boon Wan said yesterday, giving
the rationale for the changes.
Analysts said the schemes would likely attract more
takers, now that less cash is locked away in forced savings.
SLP International head of research Nicholas Mak
said: "This is a positive step for the elderly who are sitting on
their wealth, yet are strapped for cash."
Applications for the schemes will start in
February. Financial counselling will be available to those who want
to know more. The hotline number is 1800-555 6363.
Top of the news, The Straits Times, Friday December 28 2012, Pg
A1
