FY2012 Key Budget Initiatives Household 1

8/2/2019 FY2012 Key Budget Initiatives Household 1

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Budget 2012 Key Budget Initiatives 2


MEASURES FOR HOUSEHOLDS

(A) Rewarding Work for the Elderly

(A1) Higher CPF Contribution Rates for Older Workers

To help older workers better prepare for their retirement, the CPF contribution rates forworkers aged above 50 years will be increased from 1 Sep 2012. The CPF contribution ratesfor those aged above 50 years to 55 years will eventually be raised to reach the full CPFcontribution rate of 36%.

CPF Contribution Rates Changes*

Age

New contribution rates** from 1 Sep 2012

(increases from current rates are in brackets)Employer Employee Total

Above 50 to 55 years14

(+2)18.5

(+0.5)32.5

(+2.5)

Above 55 to 60 years10.5

(+1.5)13

(+0.5)23.5(+2)

Above 60 to 65 years7

(+0.5)7.5

14.5(+0.5)

* For those with monthly wages exceeding $1,500 a month. Workers in the affected age groups and earningbetween $50 and $1,500 will see pro-rated increases in their employer and employee CPF contributionrates.** % of wages.

With the increase in CPF contribution rates, the allocation rates to the Ordinary Account(OA), Special Account (SA) and Medisave Account (MA) will also be adjusted.

CPF Allocation Rates Changes

AgeNew allocation rates* from 1 Sep 2012

(increases from current rates are in brackets)

OA SA MA

Above 50 to 55 years13.5

(+0.5)9.5

(+1.5)9.5

(+0.5)

Above 55 to 60 years 12(+0.5)

2(+1)

9.5(+0.5)

Above 60 to 65 years 3.51.5

(+0.5)9.5

* % of wages.

(A2) Higher CPF Contribution Rates for Older Self-Employed Persons

The Medisave contribution rates for self-employed persons aged 50 years and above, andwith annual net trade income of $18,000 and above, will be increased by 0.5% from 1 Jan2013. This change will align the MA contribution rates for older SEPs with that for older

employees.


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Medisave Contribution Rates for Self-Employed Persons with Annual Net TradeIncome of $18,000 and above

PeriodAge as at 1 Jan

50 years or more

Current 9.0%

From 1 Jan 2013 9.5%

Further details on contribution rates can be found on the Ministry of Manpower website atwww.mom.gov.sg.

(A3) Higher Earned Income Tax Relief for Older Workers

The earned income tax relief will be doubled for workers aged 55 years and above. This willbe effective from YA2013 onwards. This will cost $30 million per year.

Age Current Relief New Relief55-59 $3,000 $6,000

60 and above $4,000 $8,000

(B) Helping Seniors Unlock Savings

(B1) Silver Housing Bonus

Elderly Singaporeans aged 55 years and above who sell their existing flats and move to 3-room and smaller flats or Studio Apartments will receive a bonus of up to $20,000 perhousehold ($15,000 cash; $5,000 CPF). Key features of the new scheme are:

Commit the sale proceeds to their CPF Retirement Account, up to the prevailing CPFMinimum Sum.

The bonus will match the proceeds committed to their CPF dollar for dollar, up to$20,000.

The top-up, along with all other monies in the Retirement Account, will be used topurchase a CPF LIFE annuity, which will provide a lifelong monthly payout.

The remaining proceeds beyond the prevailing Minimum Sum can be taken out incash.

(B2) Enhanced Lease Buy-back Scheme (LBS)

The LBS will be enhanced so that:

Beneficiaries may cash out the proceeds after setting aside the prevailing MinimumSum in their Retirement Accounts.
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The LBS bonus will be increased from $10,000 to up to $20,000 per household($15,000 cash; $5,000 CPF).

More details on (B1) and (B2) will be provided during the Ministry of National DevelopmentCommittee of Supply.

(C) Stronger Healthcare Support

(C1) More Hospital Beds

By 2020, the number of beds will be increased:

Acute Hospitals: Increased by 1,900 beds (30%) Community Hospitals: Increased by 1,800 beds (>100%)

(C2) Expansion of Long term and Community-based Care

Long term care services ranging from nursing home care to home- and community-based carewill be improved significantly by 2020.

More details on (C1) and (C2) will be provided by the Ministry of Health and Ministry ofCommunity Development, Youth and Sports during their Committee of Supply.

(D) Enhancing Affordability of Healthcare

(D1) Higher Subsidies in the Intermediate and Long Term Care (ILTC) Sector

The Government will increase the subsidies for the lower- and middle-income groups forservices in the intermediate and long term care sector:

All patients in community hospitals will now qualify for government subsidies, upfrom half of all patients currently. The middleincome group will receive the largestincrease in subsidy rates, getting a subsidy of 20 to 50% when they previously did notreceive any.

Subsidies for nursing homes, community and home-based care will also be raised.Two-thirds of Singaporean households will qualify for subsidies, up from 50%currently.

(D2) Grant for Hiring a Foreign Domestic Helper

A $120 grant per month will be provided in place of subsidies for non-medical home-basedcare to help lower- and middle-income families who may prefer to hire a foreign domestichelper to care for an elderly member at home (if the senior cannot perform three or more

Activities of Daily Living, or has severe dementia).


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(D3) GST Absorption for ILTC Sector

To further improve affordability of long term care, GST for all subsidised patients usingILTC services will be permanently absorbed. This will include Community Hospitals,nursing homes and home care.

More details on (D1) and (D3) will be provided during the Ministry of Health Committee ofSupply. Details on (D2) will be provided during the Ministry of Community Development,Youth and Sports Committee of Supply.

(D4) Enhancement for Active Seniors (EASE) Programme

A new subsidy will be given for installing elderly-friendly features in homes, such as anti-sliptreatment to bathroom tiles and grab bars. The modifications cost around $2,000, and thesubsidy will cover up to 95% of this cost. About 130,000 households with at least one senioror disabled person will benefit. This will cost the Government $260 million over 10 years.

More details will be provided during the Ministry of National Development Committee ofSupply.

(D5) Medifund Top-up

The Government will top-up $600 million to the Medifund. This enables $20 million (over20%) more help to be disbursed each year.

(D6) One-off Medisave Top-up

To offset the increase in MediShield premiums in 2012, all Singapore Citizens insured underMediShield will receive a one-off Medisave top-up.

Age Group Medisave Top-up

1-40 $50

41-50 $100

51-60 $200

61-75 $300

76 and above $400

This will benefit more than 3 million Singaporeans.

More details on the MediShield premium changes will be provided during the Ministry ofHealth Committee of Supply.


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(E) Supporting Singaporeans with Disabilities

(E1) New Development Support Programme (DSP)

Pre-school children with mild speech, language and learning delays will be able to receivelearning support intervention and if necessary therapy intervention to help them while theyare in mainstream pre-schools.

(E2) Extension of Special Employment Credit (SEC)

The SEC will be extended to employers that hire Persons With Disabilities (PWDs) of allages who have graduated from VWO-run Special Education (SPED) schools regardless ofage. The SEC for PWDs will be set at a higher quantum, at 16% of the employees monthlyincome, up to $240 per month.

The employers of about 2,600 PWDs will benefit this year.

(E3) Extension of Workfare Income Supplement (WIS)

The WIS will be extended to all PWDs who have graduated from VWO-run SPED schoolsregardless of age. About 1,400 work-capable PWDs will benefit this year.

More details on measures (E1), (E2) and (E3) will be provided during the Ministry ofCommunity Development, Youth and Sports Committee of Supply.

(E4) Doubling of Handicapped Earned Income Tax Relief

The Handicapped Earned Income Tax Relief for disabled workers of all ages will be doubledeffective YA2013:

Age Current Relief New ReliefBelow 55 $2,000 $4,000

55-59 $5,000 $10,000

60 and above $6,000 $12,000

About 1,000 work-capable PWDs will benefit each year.

(E5) Better Adult Care

The subsidies for Singaporeans with disabilities will be aligned with those for the elderly (seesection (D): Enhancing Affordability of Healthcare).

To cater to Singaporeans with disabilities who require care throughout their adult life, thecapacity of Day Activity Centres for the disabled and disability homes will be increased by250 places (or 25% increase) and 180 beds (or 21% increase) respectively.

More details will be provided during the Ministry of Community Development, Youth andSports Committee of Supply.


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(F) Uplifting Low Income Families

(F1) Extend Pre-School Subsidies

A new per capita household income criterion will be introduced to the Kindergarten FeeAssistance Scheme (KiFAS) and the Centre-based Fee Assistance for Childcare (CFAC).

(F2) Financial Assistance Schemes (FAS) for Schools

The household income ceiling of the MOE FAS will be raised. All families who meet eitherthe gross household income ceiling of $2,500 or the per capita income cap of $625 willqualify for subsidies. The enhancement will benefit an additional 40,000 students.

(F3) Top-Ups to School Advisory Committees/ School Management Committees Fund

The School Advisory Committees and Schools Management Committees funds will receivetop-ups of between $10,000 and $15,000 per year for the next three years.

(F4) Enhance Student Care Fee Assistance (SCFA) Scheme

The SCFA scheme will be enhanced and extended to help more lower-income families withmonthly household income of up $3,500. Larger families will also benefit from the new percapita household income criterion. The enhancements to SCFA will benefit 3,700 children.

(F5) Top-up to Edusave Endowment Fund

The Edusave Endowment Fund will receive a $200 million top-up.

(F6) Top-up to ComCare Endowment Fund

The ComCare Endowment Fund will receive a $200 million top-up.

(F7) Top-ups to Community Organisations

A total of $10 million will be given to our Self-Help Groups and the CCC ComCare Fund.

More details on (F1) and (F4) will be provided during the Ministry of CommunityDevelopment, Youth and Sports Committee of Supply. Details on (F2) and (F3) will beprovided during the Ministry of Education Committee of Supply.

(G) A Fair Tax System

(G1) GST Voucher

The Government has introduced a permanent system of offsets in the form of a GST Voucherto help our lower-income Singaporeans, and has set aside $3.6 billion in the GST Voucher

Fund to finance the scheme for the first five years. The GST Voucher will fully offset what


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our elderly households staying in 1- to 3-room HDB flats pay in GST, and offset about half ofthe total GST bills for our lower-income families (who do not have elderly members).

The GST Voucher has 3 components and will cost $680 million in FY2012:

GST Voucher Cash: The amount that an eligible Singaporean will receive is basedon his income and the value of his home, as shown below:

AssessableIncome for

YA2011

Annual Value of Home as at 31 Dec 2011

Up to $13,000 $13,001 to $20,000


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For further clarification on the GST Voucher Cash and Medisave, you can [email protected] call 1800 2222 888 (Mon-Fri: 8am6pm).

For further clarification on the GST Voucher U-Save, you can email

[email protected] call 1800 2222 333 (Mon-Fri: 8am6pm).
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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(H) Enhancing our Transport System(H1) Improving Bus Service Levels

The Government will partner public transport operators (PTOs) to add 800 buses over thenext five years, or a 20% increase. The Government will provide funding for 550 buses,while the public bus operators will add another 250 buses.

The Government will be funding running costs over 10 years.$1.1 billion will be set aside fora Bus Services Enhancement Fund for these commitments.

(H2) Carbon Emissions-based Vehicle Scheme (CEVS)

The current Green Vehicle Rebate (GVR) scheme will be replaced with a new CEVS in Jan

2013. This will cost the Government $34 million per year.

CEVS is based on carbon efficiency and will be applicable to all new passenger cars. Carswith low carbon emissions will enjoy rebates on their ARF of up to $20,000, while those withhigh carbon emissions will have to pay a registration surcharge of up to $20,000.

For commercial vehicles and motorcycles, the Government the GVR scheme will beextended till end-2014.

More details will be provided during the Ministry of Transport Committee of Supply.

(H3) Lowering of Special Diesel Tax for Euro V Vehicles

The Special Tax for Euro V-compliant diesel cars will be lowered from $1.25 per cc to $0.40per cc from 1 Jan 2013.

(H4) Removal of Additional Transfer Fee (ATF)

The ATF, levied on used-vehicle transactions, will be removed with effect from 18 Feb 2012.This amounts to $70 million per year in revenue foregone.

More details on measures (H3) and (H4) can be found on the Land Transport Authority

(LTA) website atwww.lta.gov.sg.

(I) Miscellaneous Tax Initiatives(I1) Excise Taxes on Non-Cigarette Tobacco Products

The excise duties on (a) beedies, ang hoon and smokeless tobacco; and (b) unmanufacturedtobacco will be raised by 20% and 10% respectively with effect from 17 Feb 2012.
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(I2) GST Relief

Goods brought in by qualifying travellers and residents from abroad will be given higherrelief from 1 Apr 2012:

Time spent abroad GST import relief

Away for 48 hours or more $600

Away for less than 48 hours $150