Changes to CPF in 2023 and how it benefits you

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13 Mar 2023


Following the Budget 2023 announcements in February, one question on the minds of many is: "How will this benefit me?"


You might have heard that 1 in 4 Singaporeans will be aged 65 by 2030. In other words, in less than a decade, the challenges posed by an ageing workforce will also come to the forefront. At the same time, the rising cost of living is a concern for many of us in our everyday lives, which makes it harder to see things from a longer-term perspective.


How then, do we balance our longer-term concerns on retirement while ensuring we still have enough for today?


As the foundation of most Singaporean’s basic retirement needs, the CPF system also needs to evolve and make the necessary changes to help our CPF members save more and enjoy greater financial stability for their retirement in the longer term.


Here are the CPF changes for 2023 and how they can benefit you: 

Helping more middle-income earners save more with CPF

1. Increase in CPF monthly salary ceiling 

As salaries in Singapore continue to rise, the maximum amount of monthly wages eligible for CPF contributions (also known as the CPF monthly salary ceiling) is periodically reviewed to help members in increasing their CPF savings. This monthly wage ceiling is currently set at $6,000.


From 2023 to 2026, the CPF monthly salary ceiling will be progressively increased to $8,000. It is important to note that the changes will be implemented in four gradual steps, which gives both employers and employees time to adjust to the new regulations. The CPF annual salary ceiling of $102,000 remains unchanged.

  CPF monthly salary ceiling  CPF annual salary ceiling
Current  $6,000 $102,000 
From 1 September 2023  $6,300 (+$300)
From 1 January 2024 $6,800 (+$500)
From 1 January 2025  $7,400 (+$600)
From 1 January 2026  $8,000 (+$600)

More support for seniors

2. Increased CPF contribution rates for senior workers (55 to 70) 

Employee's age (years)  CPF Contribution Rates from 1 January 2024 
Current Total (% of wage) Total (% of wage) By employer (% of wage) By employee (% of wage)
55 and below  37 
(No change)
(No change)
(No change)
(No change)
Above 55 to 60  29.5 31
Above 60 to 65  20.5 22
Above 65 to 70  15.5 16.5
Above 70 12.5 12.5
(No change)
(No change)
(No change)

CPF contribution rates were raised for senior workers in 2022 and 2023. Following Budget 2023, the government will also be increasing the contribution rates further from 1 January 2024.

The increased CPF contribution, like past increments, is channelled into the CPF Special Account to enable senior workers to accumulate more retirement savings.

3. Increase in minimum CPF monthly payouts for non-CPF LIFE members

Those who are not on CPF LIFE will stand to benefit too.


Starting in June 2023, the minimum monthly payout for non-CPF LIFE members (i.e. those enrolled in the Retirement Sum Scheme) will increase from $250 to $350. There is no change for members already receiving monthly payouts of $350 or more.

Easier processes for seniors to receive their monthly payouts

4. Auto-conversion of CPF inflows into monthly payouts 

Members who have started receiving their CPF LIFE payouts may have received additional contributions to their Ordinary and Special Account (OSA), such as the case of senior workers.


If they have not set aside their cohort's Full Retirement Sum (FRS), these contributions will not be available for lump-sum withdrawal and are meant to be disbursed as monthly payouts. These members need to manually inform the CPF Board to annuitise their OSA savings (i.e. convert their savings to monthly payments) for higher CPF LIFE payouts.


Starting in October 2023, the CPF Board will simplify the process for these members to enjoy greater monthly CPF LIFE payouts. Any non-withdrawable savings in their OSA will be automatically annuitised, resulting in higher payouts. An individual notification will be sent to affected members before the annuitisation occurs.


Members who have set aside their cohort FRS will not have their OSA savings automatically annuitised, ensuring that these savings remain withdrawable at any time.

5. Automatic commencement of monthly payouts for those born before 1948

CPF savings are intended to provide monthly retirement income to members - who can choose to start their payouts from age 65. To do so, they would need to manually instruct the CPF Board.


However, there are members who neglected to do so when they turn 65 years old. This prompted a change in 2018 for members to automatically receive payouts when they turn 70 (born in or after 1948). 

Helping platform workers save more for their retirement

6. CPF contributions for platform workers below age 30

Platform workers such as delivery workers and private-hire drivers have less certainty in their earnings as compared to salaried employees. This makes it more important for them to consider how they can retire  to be an important one.


To address this, platform workers below the age of 30 will be required to make CPF contributions from late 2024. The contribution rates of platform workers and the platform companies will be aligned to those of employees and employers respectively. Those who are older than 30 years old can also opt-in.


The CPF contributions will be phased over a period of five years. Platform workers who earn $500 or less in a month do not need to make CPF contributions. 


To cushion the impact on take-home pay for lower-income platform workers, the Government will also introduce the Platform Worker CPF Transition Support from 2024 to 2027 to offset part of the additional CPF contributions. Singaporean platform workers who earn S$2,500 or less per month – including from platform work and other employment sources – will be eligible for the scheme if they are required to make CPF contributions or opt-in to do so.


Additionally, eligible workers will also receive higher Workfare payments when the CPF contributions for platform workers are fully aligned with employees.

Addressing cost-of-living concerns

There are also measures in place to assist with current cost-of-living concerns.

7. More Government support with increase in Assurance Package benefits 

As announced in Budget 2023, the Government will be increasing the Assurance Package (AP) further from $6.6 billion to $9.6 billion.


The $3 billion increase takes into account higher inflation and provides additional one-time support to help Singaporeans with their cost-of-living concerns in 2023. Some examples of support are listed below.


8. Increased usage of MediSave and review of MediShield Life coverage to help manage healthcare costs 

Extended use of MediSave for homebound patients

From late 2023, homebound patients who receive treatment for the conditions covered under the Chronic Disease Management Programme can use MediSave 500/700 and Flexi-MediSave schemes to pay for home medical care.


This means such patients can use up to $500 or $700 yearly (depending on the complexity of the medical condition) from their MediSave savings to pay for medical bills, including consultation fees and blood tests conducted at home. Patients who are aged 60 and above can also use an additional $300 yearly under Flexi MediSave.


Increased coverage for cancer medication under MediShield Life

To assure the affordability of cancer drug treatments, MediShield Life claim limits for cancer drug services have been increased to $3,600 per calendar year. There is no change to the MediSave withdrawal limit of $600 per calendar year. Patients who have made cancer drug services claims in 2023 will be able to make additional MediShield Life claims from 1 April 2023, up to the new limit.

New changes to CPF – what do they mean for you in the long term? 

The CPF changes announced in Budget 2023 are aimed at ensuring the retirement goals of our members are met while providing immediate support - particularly for vulnerable groups. 


As we look ahead, it is important to consider these measures - which include a combination of both long-term and short-term solutions - to help secure your financial future so that you can focus on pursuing the things that matter to you.

Information in this article is accurate as at the date of publication.