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16 February 2024

 

 

Deputy Prime Minister and Minister for Finance Lawrence Wong announced changes related to CPF during the FY2024 Budget Statement in Parliament on 16 February 2024, as stated below. 

 

 

1.      Majulah Package

 

The Majulah Package will be introduced to strengthen support for retirement adequacy for “Young Seniors”, or Singapore Citizens in their 50s and early 60s. The Package will also be extended to Pioneer and Merdeka Generation seniors.

 

The Majulah Package comprises three components:

 

a)      Earn and Save Bonus (ESB) – Working seniors will receive an annual bonus in their Special Account or Retirement Account (depending on age) to build up their CPF retirement savings while they work. The first payment will be made in March 2025.

Average Monthly Income* based on work done the year before

Annual Bonus to be received in CPF Retirement or Special Account

$500 to ≤ $2,500

$1,000

> $2,500 to ≤ $3,500

$700

> $3,500 to ≤ $6,000

$400

* Persons with disabilities, workers who qualify for ComCare Short-to-Medium Term Assistance and caregivers of care recipients (generally includes caregivers residing with care recipients who are medically certified to have permanent moderate to severe disabilities) will qualify for concessionary ESB of $400/year, even if they earn less than $500 per month.

 

b)      Retirement Savings Bonus (RSB) – Seniors with retirement savings below the Basic Retirement Sum for 2023 of $99,400 will receive a one-time bonus in their Special Account or Retirement Account (depending on age). The bonus will be paid in December 2024.

CPF Retirement Savings as of 31 December 2022

One-Time Bonus to be received in CPF Retirement or Special Account

< $60,000

$1,500

≥ $60,000 to < $99,400

$1,000

The benefits for ESB and RSB are means-tested to ensure that support goes to those who need it most. Only seniors who own no more than one property and live in a property with an annual value of $25,000 or below would be eligible.

 

c)      MediSave Bonus (MSB) – All seniors will receive a one-time bonus in their MediSave Account. The bonus will be paid in December 2024.

Singaporeans born in

Own ≤ 1 property

Own > 1 property

Residential Annual Value

≤ $25,000

> $25,000

1959 or earlier

(Age 65 and above in 2024)

$750

1960 – 1973

(Age 51 to 64 in 2024)

$1,500

$750

All Singapore Citizens who are born on 31 December 1973 or earlier are eligible to receive the MSB.

 

For more information, please refer to the FAQs.

 

 

2.      MediSave Bonus for members from age 21 to 50

 

All adult Singaporeans from age 21 to 50 will receive a one-time MediSave Bonus of up to $300. The bonus will be paid in December 2024.

Singaporeans born in

Own ≤ 1 property

Own > 1 property

Residential Annual Value

≤ $25,000

> $25,000

1974 – 1983

(Age 41 to 50 in 2024)

$300

$200

1984 – 2003

(Age 21 to 40 in 2024)

$200

$100

 

3.      Closure of Special Account for members aged 55 and above

 

To better align CPF interest rates to the nature of CPF savings in each CPF account, the Special Account (SA) will be closed for members aged 55 and above from early 2025.  SA savings which contribute to members’ retirement payouts and hence not withdrawable on demand, will be transferred to the Retirement Account (RA) up to the Full Retirement Sum, where they will continue to earn long-term interest rates.

 

The remaining SA savings that are withdrawable on demand will be transferred to the Ordinary Account (OA) and earn the short-term interest rate. Members can voluntarily transfer their savings from the OA to the RA at any time, up to the prevailing Enhanced Retirement Sum, to earn higher interest and receive higher retirement payouts.

 

Members will be notified after the transfer of all their SA savings to their RA and/or OA, and closure of their SA, in early 2025. They will also be able to check the amounts transferred from their CPF statement. Members are not required to take any action for now.

 

For more information on how this change affects your retirement savings, please refer to the FAQs

 

For information on how other areas of your CPF savings are affected, please refer to the below FAQs:

 

-      Retirement Withdrawals

-      Retirement Sum Topping-up Scheme

-      Monthly payouts

-      CPF Investment Scheme

-      Dependants’ Protection Scheme

 

Watch this video to understand how the SA will be closed for members aged 55 and above from early 2025.

 

 

4.      Raising of Enhanced Retirement Sum

 

From 2025, the Enhanced Retirement Sum will be raised from three times the Basic Retirement Sum, to four times. This change will allow more members turning 55 to fully commit their CPF savings to receive higher CPF payouts, should they wish to do so.

 

The Full Retirement Sum will remain at two times of the Basic Retirement Sum. 

 

A member turning 55 years old in 2025 can receive about $3,300 per month of CPF LIFE payouts at age 65, if he chooses to top up to the raised ERS, up from about $2,500 today. 

 

For more information, please refer to the FAQs.

 

 

5.      Enhancements to Silver Support Scheme

 

From 2025, the Silver Support Scheme quarterly payments will be increased by 20% to strengthen support for eligible senior Singaporeans who have less in retirement. The qualifying household monthly income per person threshold will also be raised from $1,800 to $2,300.

HDB Flat Type2

Total CPF contributions ≤ $140,000 by age 551

Household monthly income per person ≤ $1,500

Household monthly income per person > $1,500 to ≤ $2,300

1- and 2-Room

$1,080

$540

3-Room

$860

$430

4-Room

$650

$325

5-Room3

$430

$215

1 Self-employed persons should also have an average annual net trade income of not more than $27,600 when they were aged 45 to 54.

2 Senior should not own, and not have a spouse who owns, a 5-room or larger HDB flat or private property or multiple properties.

3 Senior may live in, but do not own, a 5-room HDB flat.

 

For more information, please refer to the FAQs.

 

 

6.      Enhancements to Workfare Income Supplement Scheme

 

From 2025, the qualifying income cap for the Workfare Income Supplement Scheme (WIS) will be increased from $2,500 to $3,000 to ensure that lower-income workers continue to be covered, even as wages grow.

 

Workfare payments will also be increased, with the maximum payment increased from $4,200 to $4,900 per year.

Age

Maximum Workfare annual payment

60 and above

$4,900

45 to 59

$4,200

35 to 44

$3,500

30 to 34

$2,450

For more information, please refer to the FAQs

 

 

7.      Enhancements to Matched Retirement Savings Scheme

 

The Matched Retirement Savings Scheme (MRSS) will continue beyond its pilot to help senior Singaporeans build up their retirement savings, through dollar-for-dollar matching grants to their Retirement Account.

Enhancements

Current

From 1 January 2025

Increase in matching grant cap

$600 per year

$2,000 per year, with a $20,000 cap over an eligible member’s lifetime

Removal of age cap

Age 55 to 70

Age 55 and above

Tax relief for cash top-ups that attract the MRSS matching grant will be removed as the matching grant is already a significant benefit extended by the Government. Givers can continue to receive up to $16,000 in tax relief on cash top-ups that do not receive the matching grant.

 

For more information, please refer to the FAQs.

 

 

8.      Increase in CPF contribution rates for senior workers and CPF Transition Offset

 

To continue strengthening the retirement adequacy of senior workers, the employer and employee contribution rates for employees aged above 55 to 65 will be raised by 0.5 percentage point and 1 percentage point respectively from 1 January 2025.

 

With the closure of the Special Account (SA), the increase in CPF contributions allocated to SA will be fully allocated to the Retirement Account (RA) instead, up to the Full Retirement Sum (FRS). For members who have set aside the FRS in the RA, these contributions will be channelled to the OA instead.

 

A one-year CPF Transition Offset equivalent to half of the 2025 increase in employer CPF contributions will be provided to employers to cushion the impact on business cost. This will be provided automatically and employers need not apply for the offset.

 

For more information, please refer to the FAQs

 

 

9.      Increase in income threshold of spouse/siblings for tax relief from cash top-ups

 

The income threshold to qualify for tax relief for cash top-ups made to spouse/siblings will be increased from $4,000 to $8,000 in Year of Assessment (YA) 2025 for top-ups made from 1 January 2024.

 

For more information, please refer to the FAQs.