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Singapore Budget 2014: Medisave top-up, higher CPF rates for older Singaporeans

Published on Feb 21, 2014 6:22 PM
 
A queue at Choa Chu Kang Polyclinic. Older Singaporeans too young to be included in the Pioneer Generation Package will still benefit from Medisave top-ups, and will also enjoy higher CPF contribution rates if they are still working. -- ST FILE PHOTO: JOSEPH NAIR

Older Singaporeans too young to be included in the Pioneer Generation Package will still benefit from Medisave top-ups, and will also enjoy higher CPF contribution rates if they are still working.

The changes will help this group with medical expenses and to build a retirement nest egg.

The Central Provident Fund (CPF) Medisave top-up is for citizens born from 1950 to 1959 - those aged 55 to 64 this year and so just outside the qualifying mark for Pioneer Generation benefits.

Pioneer Generation benefits are for those born in 1949 or before.

The amount of the Medisave top-up will vary, depending on the annual value of an individual's home.

People with homes with an annual value of $13,000 or less will get $200 a year over the next five years in their Medisave accounts. The top-up for those owning homes with an annual value above $13,000 or for those who own more than one property will be $100 a year for five years.

CPF contribution rates for older workers will also go up from January next year. They will rise by 1.5 percentage points for those aged 50 to 55, with 1 percentage point of the increase to come from the company and the remaining 0.5 percentage point from the worker.

The contribution rate paid by companies for workers aged 55 to 65 will also be raised by 0.5 percentage points.

The increased employer contributions will go to the Special Account, while the higher employee levy is for the Ordinary Account.

These changes are on top of the 1 percentage point increase in the Medisave contribution rate, which applies to all workers.

There will be help to offset the rise in older worker contribution rates to help companies adjust. This one-year benefit will cost the Government $30 million.

For more news and analysis on Singapore Budget 2014, click here for ST's Big Story coverage.