More elderly flat owners will be able to sell part of their lease back to the Housing Board for retirement income, under changes to the Lease Buyback Scheme announced yesterday.
They will also be able to get more cash up front and choose how many years of their lease to keep, within limits.
These changes, made in response to feedback, will take effect from April 1, when the scheme will also be extended from three-room and smaller flats to include four-room units.
However, National Development Minister Khaw Boon Wan said he does not expect the change to result in a spike in the number of people interested in the scheme, which has seen low take-up rates since its launch in 2009.
About 800 households have taken part so far, and Mr Khaw told reporters at a media briefing: "I don't think it'll be in the tens of thousands...a few hundred, definitely, maybe a few thousand."
The biggest change is that, for households with two or more owners, each owner only has to top up his Central Provident Fund Retirement Account to half of the individual age-adjusted Minimum Sum, using proceeds from the sale of the lease.
Previously, proceeds were channelled to pay the full Minimum Sum amount.
This means owners can get more cash up front, capped at $100,000.
"We have always said that the Minimum Sum is enough to look after the basic needs of a couple," said Mr Khaw.
The flat owners will get a cash bonus if they participate in the Lease Buyback Scheme: $20,000 for three-room and smaller flats, $10,000 for four-roomers.
Fearing that some owners might "just spend or invest (the proceeds) unwisely", Mr Khaw added:"I urge our seniors to exercise prudence and caution."
He hopes couples will use the cash to top up their CPF accounts voluntarily instead.
The Government will raise the monthly household income ceiling from $3,000 to $10,000, making more seniors eligible.
Flat owners will also get a choice of how many years to keep on their leases, depending on their age. To be eligible for the scheme, flat owners must be at least 63 years old.
With four-room flats included, 75 per cent of elderly HDB households could potentially take part in the scheme, up from 35 per cent now.
About 290,000 HDB flats are owned by Singaporeans aged 55 or older, and 80 per cent of these flats are fully paid for.
But, while the scheme has been enhanced, the best option for elderly couples is to live with their children and rent out their flat, said Mr Khaw.
"Should you need it, the option is there...but most people do not need it," he said.
Asked if five-room flats might qualify eventually, he said: "Let's do it for the four-room first."
Property experts welcomed the changes to the scheme. PropNex Realty chief executive Mohamed Ismail Gafoor said: "It is finally ready to take off."
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