The Ministry of National Development (MND) is studying a new reverse mortgage scheme to help seniors better convert the flats they own into cash, said its minister Khaw Boon Wan on Monday.
The move is part of a key focus this year on meeting the housing needs of the elderly, the poor and the vulnerable, he told the House when mapping out his ministry's budget and policies for the year.
"Our priority is to help them retire comfortably with security" and so, it is timely to revisit reverse mortgage as an extra option for the elderly, said Mr Khaw.
"MND has begun a serious study of this option. We hope to formulate a practical scheme for our seniors," he added. A reverse mortgage is a financial scheme in which flat owners can use their home as security for a loan that will be dispensed in regular cash payouts.
Insurer NTUC Income previously offered such a mortgage scheme but it did not take off, Mr Khaw noted. Only 24 households took it up between the time it was introduced in 2006 and when it was scrapped in 2008.
But elderly folk asked for such a scheme last year during Our Singapore Conversation sessions, as they preferred to live in the same home and also retain it as an asset to bequeath to their children, the minister added.
The Government is also reviewing the Enhanced Lease Buyback Scheme, in which elderly households sell part of their flats' leases to HDB and use the net proceeds to top up their Central Provident Fund Retirement Accounts.
Currently, only those living in three-room or smaller flats qualify, but the scheme may be extended to larger flats.
It is also comforting for many elderly folk to have their children and grandchildren living nearby, said Mr Khaw, acknowledging the calls of Ms Lee Bee Wah (Nee Soon GRC) and Dr Teo Ho Pin (Bukit Panjang) to build more studio and multi-generation flats.
While it is not difficult to do so in non-mature towns where new flats are still being built, it is harder in mature towns with fewer opportunities for new units, Mr Khaw said.
"Nevertheless, I want to push the limits to enable extended families to live near one another," he added, without elaborating on how it will be done.