The much-awaited Silver Support Scheme will make its first payout in July, with some 140,000 Singaporeans aged 65 and above receiving between $300 and $750 every three months.
About three in 10 Singaporeans aged 65 and above will qualify for the payouts, with those living in smaller Housing Board flats receiving more.
The Central Provident Fund (CPF) Board, which is implementing the scheme, will consider three factors in deciding whether a person qualifies: lifetime wages, housing type and level of financial support in the household.
"Some of our older Singaporeans have fewer resources in their retirement years than others, because they earned low wages even after working consistently throughout their lives, or because they stayed home to raise their families," said Finance Minister Heng Swee Keat.
The scheme will provide these seniors "a modest but meaningful supplement to their retirement incomes", he said. "(But) it is not intended to substitute for other sources of support."
The proportion of Singaporeans aged 65 and above will double from one in eight now to one in four by 2030, he noted.
There is no need to apply to join the scheme. Instead, the CPF Board will use information that it already has, such as CPF contribution history and housing type.
To qualify for the scheme, the person must not have contributed more than $70,000 to the CPF by the age of 55. They must live in a one- to five-room HDB flat, but those who own or whose spouse owns a five-room or larger HDB flat or private properties will not qualify. Average income per household member also cannot exceed $1,100 each month. The eligibility will be reviewed yearly.
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These criteria will "make sure Silver Support goes to those who have lower incomes over their lifetimes and less retirement support", Mr Heng said. He added that a retired couple living in a three-room flat can receive $4,800 each year.
Recipients will receive the money in their bank accounts or cheques if they do not have bank accounts.
The scheme was announced by Prime Minister Lee Hsien Loong at the National Day Rally in August 2014. During campaigning in the general election last September, PM Lee described the scheme as one that helps seniors to "have a pension in old age".
A new law was passed in Parliament in August last year and the scheme was to have kicked in by this month, but Mr Heng said that more time was needed because it was a "new and extensive" scheme.
The first payout in July will be a double payment covering six months from April to September. Thereafter, the payouts will be made every three months: in March, June, September and December.
The scheme costs close to $320 million in the first year. "The cost will likely increase over time as our population ages," noted Mr Heng.
Those who do not qualify for Silver Support will benefit from other help schemes such as the GST Voucher, MediShield Life and the Pioneer Generation Package, Mr Heng said.
Besides the Silver Support Scheme, Mr Heng also announced yesterday increases in the monthly cash allowance for those under the Public Assistance Scheme. A two-member household will receive $870, or $80 more, in cash each month.
To provide more community support for seniors, pilot networks will be set up. Run by a small team of full-time staff, the networks will involve volunteers, voluntary welfare organisations, businesses and schools.
The measures targeted at seniors will make Singapore a model for successful ageing, Mr Heng said.
Mr Patrick Tay, who chairs the Government Parliamentary Committee for Manpower, said that with the scheme kicking off in July, this gives seniors time to make an assessment of whether they qualify.
Ms Peh Kim Choo, chief of programmes at the Tsao Foundation, said that the difficulties of defining and calculating lifetime wages and household support could have held back the implementation.
But the payouts can make a difference to the seniors, she said. Some will use it for essentials like medical care. "For those whose basic needs were met already, this additional payout will enable them to save, buy better food and enjoy a little of life's luxuries," she said.
Correction note: The information on who can qualify for the Silver Support Scheme has been edited for clarity.