Severely disabled people can soon withdraw cash from Medisave

Those deemed severely disabled will be able to dip into their Medisave accounts for cash from the age of 30.
Those deemed severely disabled will be able to dip into their Medisave accounts for cash from the age of 30.ST PHOTO: KUA CHEE SIONG

People who are severely disabled will be allowed to dip into their Medisave accounts for cash from 2020 - provided they or their spouse have at least $5,000 in their accounts.

This is the first time members can withdraw cash from Medisave since it was set up in 1984 as part of Central Provident Fund contributions to defray hospital bills.

The bigger the sum in their accounts, the more the members will be able to withdraw. Those with $5,000 in their Medisave accounts - a floor that covers three in four people aged 65 years and older - will be able to take out $50 a month.

On the other hand, those with $20,000 or more in their Medisave accounts will be allowed to withdraw $200 a month. This covers about half the people aged 65 or older, who are more likely to suffer from severe disabilities.

Separately, a fund is being set up to help needy disabled people.

Explaining the rationale to allow cash withdrawals from Medisave, Health Minister Gan Kim Yong said: "When a Singaporean is facing severe disability and, at the same time, facing financial difficulties, I feel that we can afford to be more flexible."

He said this change will not result in higher Medisave contributions. Those deemed severely disabled will be able to dip into their accounts from the age of 30.

Potentially half the population would be able to draw on this facility in their lifetime.

Mr Gan also revealed that a new safety net called ElderFund will provide needy disabled people up to $250 a month from 2020.

In the same year, a long-term disability insurance called CareShield Life will kick in and be made compulsory for people aged 40 years and younger. It will pay those who are severely disabled at least $600 a month for life.

Another two million people, aged 41 years and older when CareShield Life is launched in 2020, will be encouraged to join the scheme that is optional for them.

These Singaporeans will be offered a $500 to $2,500 incentive to offset their premiums over 10 years.

If they join the scheme within two years, those with chronic ailments and mild or moderate disabilities will be allowed into the fold despite their health conditions. There will be stricter underwriting for those who join later.

Asked if this is fair to healthy people joining the scheme as it could potentially push up premiums, Mr Gan said that "the Government will do its part", and details will be announced later.

People from two-thirds of households can get 20 per cent to 30 per cent premium subsidies. Those who cannot pay their premiums after some years can get additional support.

Those aged 42 to 51 years in 2021 who are on ElderShield400 will be automatically enrolled in CareShield Life. They have until December 2023 to opt out with no penalty.

ElderShield400, offered by three insurance companies, provides $400 a month for up to six years for people who are severely disabled.

Those on the scheme who seek to upgrade to CareShield Life will need to pay higher premiums for 10 years or up to the age of 67, whichever is longer.

Those who are on the older ElderShield300 or who do not have ElderShield coverage may also join CareShield Life if they pay an additional "catch-up premium" over 10 years to bring them to the level of those on ElderShield400.

Mr Chaly Mah, who chaired the ElderShield Review Committee, said that these new measures "will provide better protection and assurance for all Singaporeans".

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A version of this article appeared in the print edition of The Straits Times on July 04, 2018, with the headline 'Severely disabled people can soon withdraw cash from Medisave'. Print Edition | Subscribe