SINGAPORE - Elderly Singaporeans can now get as much as $100,000 in cash, plus up to $20,000 in cash bonuses, if they downgrade to a smaller home or sell the tail end of their Housing Board (HDB) flat lease back to the Government.
The hope is that these payouts will entice more low-income flat owners here to unlock the value of their homes in old age and be better funded for retirement.
The Ministry of National Development (MND) announced these changes to its Silver Housing Bonus and Lease Buyback Scheme on Thursday.
Both schemes are targeted at the lower-income elderly, whom some commentators have termed "asset-rich, cash-poor".
Often, they own the flats they live in, but lack family and financial support, and need more cash to cope with daily expenses.
The Silver Housing Bonus is a new scheme announced in February. It aims to give a $20,000 bonus to elderly home owners who may no longer need a large flat, and choose to downsize.
However, before the scheme was even implemented, it was met with scepticism because rules dictated that to get the bonus, the net proceeds unlocked from the sale of a flat had to be used to top up the CPF Retirement Accounts of flat owners.
Because the top-up had to be sufficient to cover the CPF prevailing Minimum Sum, which currently amounts to $139,000 per person, or about $278,000 per couple, most flat owners would receive very little cash from the downsizing exercise. This, in turn, meant that the "Silver Bonus" of $20,000 was not a strong enough draw, said critics.
MND said on Thursday that after receiving public feedback, it had decided that flat owners should need to top up only $60,000 into their Retirement Accounts per household, and be able to keep the next $100,000 of the net proceeds from the flat sale.
Any proceeds in excess of $160,000 will be used to top up CPF Retirement Accounts.