Before COVID-19 made an appearance in the reality show we call life, there were three things Singaporeans loved complaining about:
- The weather
- PMDs
- CPF
We have more rain nowadays and PMDs are no longer gracing our streets, but we still love to talk about and complain about CPF.
Well, it appears that the government has taken our concerns into consideration, as they’re making some changes to the scheme.
Here are some of the proposed changes to the CPF Act which were tabled in a parliamentary debate yesterday (1 Nov).
Automatic Transfers
As Manpower Minister Tan See Leng noted in Parliament, members under the Retirement Sum Scheme will stop receiving payouts once their Retirement Account is depleted.
Some are not aware that if they still have funds in their Ordinary or Special account, they can be transferred to their Retirement account.
Well, from 2022, this transfer will be automatic.
As for the 75,000 CPF Life members – an insurance scheme – who have started getting payouts, inflows from their Retirement Account will automatically be used to increase their CPF Life payouts.
Flexibility in Transferring Funds
Those turning 65 from 2023 will also have the flexibility to decide when to transfer the savings in their Ordinary and Special accounts to their Retirement Account.
This change will come into effect in Jan next year.
At the moment, this transfer will only take place once the member is eligible to start receiving payouts.
Simplifying Tax Relief Schemes
CPF rules aren’t always easy to understand, as a drunk uncle at a coffee shop once told me.
In a bid to simplify rules, tax relief for the Voluntary Contributions to MediSave Account scheme will be also provided to givers instead of recipients.
Currently, there is one tax relief scheme for givers under the Retirement Sum Topping-Up scheme, and another for recipients under the Voluntary Contributions to MediSave Account.
This way, members won’t be confused by the different rules for the two different schemes, as both will be aligned.
Shorter Duration For Retention of CPF Monies After Member’s Death
In case you don’t know, a member’s CPF funds can be retained in their account for up to seven years with accused interest before it’s disbursed.
From April next year, however, this duration will be shortened to six months, which will be especially helpful for bereaved families dealing with post-mortem expenses.
The government will also be able to recover grants which have been automatically disbursed to a CPF member who later chooses not to continue meeting the eligibility criteria.
Those hoping for a change to the current rules for lump sum withdrawal of CPF savings will have to keep on hoping, though, as no amendments were proposed.
Reader: I guess I’ll just have to keep on complaining then
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