Budget 2020: 435,000 lower income seniors to benefit from new Matched Retirement Savings Scheme

SINGAPORE — To help older middle to lower income Singaporeans meet their retirement needs, the Government will match every dollar of cash top-up made to Central Provident Fund (CPF) Retirement Accounts, capped at S$600 annually, as part of the new Matched Retirement Savings Scheme.

Singaporeans between the ages of 55 and 70 who have not been able to set aside savings in the prevailing Basic Retirement Scheme (BRS) will be eligible for the scheme.

The scheme, which will take effect from 2021 to 2025, will benefit about 435,000 Singaporeans, said Deputy Prime Minister Heng Swee Keat during his Budget statement in Parliament on Tuesday (Feb 18). 

The BRS provides Singaporeans with monthly retirement payouts that cover living expenses. 

However, for some members of the elderly population, these payouts will not be enough, said Mr Heng, who added that some of these individuals had low incomes during their working years and currently have little to no family support.

To supplement the Matched Retirement Savings Scheme, the Government will also enhance the Silver Support Scheme to provide older middle to lower income individuals with greater financial security in their silver years.

The Silver Support Scheme currently provides cash payouts to the bottom 20 per cent of Singaporeans aged 65 and above. Support is also provided for some of those who are slightly above the bottom 20 per cent. 

The changes, which will apply from Jan 1, 2021, include:

• Existing quarterly cash payouts will be raised by 20 per cent. This means those living in smaller flats will receive a cash payment of S$900, a S$150 increase from S$750 previously.

• The eligibility criteria for Silver Support will be broadened such that more seniors can be covered under the scheme.

• Under the enhancements, Singaporeans whose total CPF contributions do not exceed S$140,000 by the age of 55 will be eligible. Currently, the ceiling is set at S$70,000.

• For self-employed persons, they should have an average annual net trade income of not more than S$27,600. Net trade income refers to the gross trade income minus all allowable business expenses, capital allowances and trade losses as determined by the Inland Revenue Authority of Singapore (Iras). The current ceiling is S$22,800.

• A new payout tier will also be introduced to provide a smaller payout to seniors whose monthly household incomes per person are above S$1,300 but do not exceed S$1,800. Currently, these individuals do not receive Silver Support.

The Silver Support payout will continue to supplement the monthly cash assistance provided by the ComCare Long-Term Assistance (LTA) Scheme from the Ministry of Social and Family Development.

All Singaporeans aged 65 and above who are ComCare LTA beneficiaries will receive a Silver Support payout of S$360 per quarter. 

All Singaporeans aged 65 and above in 2021 will be automatically assessed for eligibility and so there is no need for seniors to apply for the scheme.

Those who are eligible for Silver Support will be notified by the CPF Board and all eligible beneficiaries will receive their first payout in December this year.