UPDATED: In his Budget 2015 statement this afternoon, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam revealed that major steps will be taken to strengthen social security.
He noted that home ownership is one of the four pillars of the social security system, with the other pillars being the CPF scheme, healthcare and workfare.
The government will raise the CPF salary ceiling from $5,000 to $6,000 to benefit at least 544,000 people. Also, the contribution cap under the Supplementary Retirement Scheme will be raised. Both changes will start in January 2016.
Meanwhile, the CPF contribution rates for workers aged between 50 and 55 will be increased by 2.0 percent in 2016, while an additional Special Employment Credit of up to 3.0 percent of wages for workers aged 65 and above in 2015.
To help older workers living in lower-income households, a Silver Support Scheme will be introduced to supplement incomes for 20 to 30 percent of seniors aged 65 and above in their retirement years.
Three factors will be taken into consideration for eligibility of Silver Support, namely lifetime wages, level of household support and type of housing they live in.
Silver Support will be paid quarterly, similar to workfare and provides lifetime coverage for those who are eligible. The average recipient will get $600 every quarter but those living in smaller flats will receive more.
Example of Silver Support Scheme
Source: Yahoo Singapore
Eligible Singaporeans will not need to apply for Silver Support and the scheme will automatically take effect in the first quarter of 2016.
According to Mr Tharman, Silver Support will cost $350 million in the first full year, and the government will spend $1 billion a year on the scheme and workfare combined.
At the same time, the government will co-fund wage increments for Singaporeans earning $4,000 or below.
More updates coming soon.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
