SINGAPORE - Acting Manpower Minister Tan Chuan-Jin today announced the refinement of the current housing refund policy for CPF funds.
In moving the second reading of changes to the CPF Act, Minister Tan said that the new policy will ensure that CPF housing refunds are consistent with the amounts contributed by each co-owner to the property.
At the same time, it will not require older members to retain in their CPF more refunds than necessary.
Currently, members who sell their property before age 55 are required to refund into their CPF account the principal amount that they withdrew for the property, including the prevailing Ordinary Account (OA) interest that would have accrued on this amount, or P+I in short.
At age 55, a member is required to set aside the Minimum Sum (MS) from his existing CPF balances, and he may withdraw his CPF savings in excess of the MS after having also set aside the required amount in his Medisave Account for his healthcare needs.
So when a member sells his property after age 55, only the amount needed to bring the member up to his MS must be refunded.
"In other words, for a member who sells his property after age 55, he will refund his MS shortfall or his P+I, whichever is lower. Remaining proceeds from the sale of his property is received in cash," outlined Minister Tan.
He pointed out that while the current refund rules for members over 55 avoid collection of housing refunds in excess of MS, there may be certain scenarios involving more than one co-owner, where the refunds required of the co-owners may not match the amount of CPF each co-owner used to pay for that property.