Medisave cash withdrawals: 3 factors considered

Experts in ageing and disability believe that the Ministry of Health’s move may have a small impact due to the decreasing Medisave balance and other demands for the funds.
Experts in ageing and disability believe that the Ministry of Health’s move may have a small impact due to the decreasing Medisave balance and other demands for the funds. PHOTO: ST FILE

The Ministry of Health (MOH) considered three factors before deciding on the amounts which severely disabled people should be able to withdraw in cash from their Medisave accounts, said a ministry spokesman yesterday.

These included the basic costs of long-term care for this group and the need to balance withdrawal amounts with Medisave adequacy.

Other sources of long-term care funding - such as government subsidies and social safety nets, personal savings, as well as family and community support - were also taken into account.

On Tuesday, MOH announced that from 2020, severely disabled people aged 30 and older can draw up to $200 in cash from their Medisave accounts every month. This is to give them more flexibility in paying for the care they need, which can cost several thousand dollars a month and include items like adult diapers and special foods. The maximum amount that a person can draw every month ranges from $50 to $200, depending onhis or her Medisave balance. They can also tap their spouse's account for their needs.

But some experts in ageing and disability have said that this move may have a limited impact over time, due to the decreasing Medisave balance and other demands for the funds.

"Those who are born with or acquire severe disabilities during their working years are less likely to be employed and have the opportunity to build up their Medisave account," pointed out Dr Marissa Lee Medjeral-Mills, executive director of the Disabled People's Association.

Nearly half of Singapore residents aged 65 and older have at least $20,000 in their Medisave accounts, while about a quarter have $5,000 or less.

The median Medisave balance for this age group is $19,000. A severely disabled person who starts off with this amount and draws the maximum allowance of $150 every month would see the amount reduced to less than $15,000 in about two years and three months - assuming that no other funds are added to the account or deducted for other payments. This will put him in the next tier where he can withdraw only $100 a month.

But Mr Alfred Chia, chief executive of SingCapital, said people who tap this scheme also need to factor in other expenditures such as the payment of premiums for national insurance plan MediShield Life.

Linette Lai

A version of this article appeared in the print edition of The Straits Times on July 05, 2018, with the headline 'Medisave cash withdrawals: 3 factors considered'. Print Edition | Subscribe