RETIRED taxi driver Chia Boon Chuan was all smiles on Tuesday as he became one of the first to receive a payout from the Housing Board's new Lease Buyback Scheme (LBS).

The 68-year-old bachelor has been living alone in his two-room Queensway flat for over 40 years. With no financial support from children, he has been dipping into his savings and annuities for the past eight years.

Now, under the LBS, he has received a $5,000 upfront payment and will be paid more than $400 a month for the rest of his life, in exchange for the tail-end of the 99-year lease of his flat.

'I'm very, very happy,' he said. 'I even tried to persuade some of my neighbours and friends to apply...I'm saving up my money for a rainy day, but in later times I'll probably buy a laptop as at the moment I've no computer.'

Five other homeowners were among the first to receive cheques from HDB. A total of 344 applications have been received as of Tuesday, the rest of which are still being processed.

Under the scheme, HDB will buy back the tail-end of a flat lease at market rate, leaving the household with a remaining 30-year lease. A $10,000 subsidy will be given and half of this paid upfront. The other half, along with the money for the lease, will be used to buy a new CPF Life annuity in the homeowner's name that provides a monthly stream of income for life.

Applicants have to undergo financial counselling to ensure they understand the terms and conditions of the scheme. For instance, they cannot bequeath the flat to their children.

The LBS is targeted those without the option of living in a rental flat, downgrading to a smaller flat, sub-letting their entire flat, or relying on family support, said Mr Tay Kim Poh, HDB's chief executive.

He explained: 'The applicants (so far) are...mostly retirees who don't have other sources of incomes. Most of them are living by themselves with their spouse, so in that sense they do not get much family support from their children.

'This is a good scheme for them giving them a steady source of income for their retirement needs. And they can continue to live in the same flat - the same environment which they're familiar with.'

Read the full report in Wednesday's edition of The Straits Times.