FROM today, low-income families who rent flats from the Government will not be hit by a rise in rent when their monthly income exceeds $800.
Instead, their rents will stay unchanged for two years. They will get another two-year waiver should their household income still remain low compared to the rent increase they face. This will be decided by the Housing Board on a case-by-case basis.
These new moves for poor families were announced yesterday by National Development Minister Khaw Boon Wan in his blog. The change is to avoid the "cliff effect" of having a rise in rent nearly wipe out tenants' wage gains.
The prospect of such a rise may also inadvertently discourage some tenants from "working hard to improve their incomes", he added, noting that it was Emeritus Senior Minister Goh Chok Tong who had alerted him to the phenomenon two years ago.
There are about 46,000 HDB rental flats for low-income families earning no more than $1,500 a month. Rents are tiered: For a first-time tenant in a one-room flat earning $800 or less, the rent ranges from $26 to $33.
Should this tenant's income cross the $800 mark, he enters the second tier of those with household incomes of $801 to $1,500. Their rent for a one-room flat is $90 to $123.
Factory production operator Kartina Samah, for instance, had her wages raised from $800 to $930 last October. She was told by HDB that the rent for her two-room flat in Whampoa would rise from $44 to $138.
"I got a shock," said the 39-year-old divorcee, whose 55-year-old mother and 15-year-old daughter live with her. "After CPF (Central Provident Fund) deductions, I would be earning $700 plus. I did not know how I would cope with the rent." HDB granted her a two-year waiver, and she has welcomed the fact that it will now come automatically for others in her position.
Tanjong Pagar GRC MP Lily Neo, whose Kreta Ayer ward has the most rental blocks in Singapore, was happy to hear the news. She sees three to five cases a week of residents pleading for a waiver of their rent hike at her Meet-the-People Session.
"For these low-income families, every dollar counts," she said. "If their wages rise, they are so hopeful that it will help their daily living. But the minute it's eaten up by rental, their livelihoods are not improving at all."
While the appeals she makes to HDB are usually granted, she notes that making the waiver automatic will save residents the "headache" of seeking one.
There were 1,869 tenants who have crossed the $800 income mark, Mr Khaw said in his blog, and 1,004 of them have been granted a waiver on appeal.
This article was first published in The Straits Times on June 20, 2013
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