Central Provident Fund (CPF) top-ups will be given to Singaporeans who are aged 50 and above this year – or those born in 1973 or earlier – as part of a new S$7 billion package to boost retirement savings.
Called the Majulah Package, it is aimed at extending help to “young seniors”, with more support for those with lower incomes and less wealth, Prime Minister Lee Hsien Loong announced in his National Day Rally speech on Sunday (Aug 20).
But the package will also cover the Merdeka and Pioneer generations.
It will benefit 1.4 million older people, said Mr Lee.
Speaking at the Institute of Technical Education headquarters in Ang Mo Kio, Mr Lee said the support will be tiered, depending on an individual’s income and CPF savings.
The Majulah Package consists of three components, the first of which is an Earn and Save Bonus for eligible seniors who are working. Lower- and middle-income workers will get extra CPF funds of up to S$1,000 a year. This will be credited to their CPF accounts on top of the usual employer and employee contributions.
Eligible individuals will receive this bonus yearly as long as they are working, whether it is part-time or full-time work.
Most young seniors are still working and have some years to go before retirement. We encourage you to continue working as long as you can,” said Mr Lee.
The second component of the Majulah Package is a Retirement Savings Bonus for those who have not met the CPF Basic Retirement Sum. They will receive a one-time CPF bonus of up to S$1,500.
This also applies to those who are not working, including homemakers who have given up their careers to raise their families, Mr Lee said.
The third element of the package is a one-time MediSave Bonus of up to S$1,000. This will help provide “some extra buffer” to help pay medical expenses and insurance premiums, explained Mr Lee.
Those in the Pioneer Generation and Merdeka Generation will receive the Earn and Save Bonus if they are still working and meet the income criteria, said Mr Lee. And those who are not working can still get something from the Retirement Savings Bonus and MediSave Bonus, he added.“This will be in addition to the PG (Pioneer Generation) or MG (Merdeka Generation) benefits that you are already receiving and will continue to receive. Think of this as a 58th National Day present!” Mr Lee said.
The Ministry of Manpower (MOM) said separately that the package benefits are means-tested to ensure that support goes to those who need it the most.
The eligibility criteria for the various benefits will include factors such as income, the annual value of a residence, whether the individual owns more than one property, as well as CPF savings. More details will be announced in 2024.
The minimum amounts for the Earn and Save Bonus, Retirement Savings Bonus, and MediSave Bonus are S$400, S$1,000, and S$500 respectively, said MOM.
Explaining why the Majulah Package benefits will not be paid in cash, MOM noted that the measures are meant to help older Singaporeans with their retirement and healthcare needs.
“Monies in the CPF accounts will grow with interest and can be streamed out via monthly CPF payouts in retirement, or used directly for their healthcare needs,” it added.
-CNA
