CPF issue: Only one in 10 use CPF for housing after 55; flexibility given in using RA savings

Of the Central Provident Fund members aged 55 and above, only one in 10 are still using their CPF to pay their monthly instalments for housing, and only one in 20 may have to use some cash for their instalments, Manpower Minister Tan Chuan-Jin said i
Of the Central Provident Fund members aged 55 and above, only one in 10 are still using their CPF to pay their monthly instalments for housing, and only one in 20 may have to use some cash for their instalments, Manpower Minister Tan Chuan-Jin said in Parliament on Tuesday, July 8, 2014. -- PHOTO: ST FILE

SINGAPORE - Of the Central Provident Fund members aged 55 and above, only one in 10 are still using their CPF to pay their monthly instalments for housing, and only one in 20 may have to use some cash for their instalments, Manpower Minister Tan Chuan-Jin said in Parliament on Tuesday.

For those who face difficulties with housing loan repayments, the Government has exercised flexibility "where a case merits it", he added. Contrary to usual policy, such members have been allowed to use part of their Retirement Account savings for housing even if they do not meet the requirement of having half the Minimum Sum in cash.

About 500 requests to use more Retirement Account savings for housing are received each year from CPF members aged 55 and older, and about two-thirds of these appeals are approved, said Mr Tan. "For cases that are not approved, we also work closely with HDB to explore alternative financing or housing options for the CPF member."

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Responding to Mr Seng Han Thong (Ang Mo Kio GRC), Mr Tan said: "I would like to reassure Mr Seng that we are ready to exercise flexibility in the use of CPF for housing after 55 because we recognise that helping a member maintain a roof over their heads is an important part of our overall retirement adequacy goals."

But it would not be desirable to automatically let those with less than half the Minimum Sum continue using their CPF for housing, as Ms Irene Ng (Tampines GRC) had called for.

That is because some such members would be able to service their housing loans using cash, instead of drawing upon their Retirement Account savings and hence lowering their future monthly payouts.

"We also do not want to encourage rash and imprudent housing purchases by members who think that they can automatically draw down fully on their Retirement Account funds to service their loans," he added.

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