Leong Sze Hian
I refer to the report “Medisave contribution may go up to cover costs” (ChannelNewsAsia, Jan 28).
It states that
“Medisave contribution may go up as the need for long-term care increases with Singapore’s aging population. Health Minister Khaw Boon Wan said the current contribution rate of 6.5% to about 9% does not build up enough reserves to pay for both big medical bills and long-term care”
Introduced in 2004, the MRA was scheduled to increase by $2,500 each year until it reached $25,000 on 1 January 2013. Yet last year, there was a big jump in the increase from the original $2,500 to $4,000.
This year, the increase is even higher at $4,500. Starting 1st January 2010, the Medisave Required Amount (MRA) has also been increased from $18,000 to $22,500.
Arguably, the inflation in 2008 was at a high of 6.5 per cent, so perhaps the increase of $4,000 then, could be justified. Yet, last year’s inflation was 0.2 per cent.
So, why is this year’s $4,500 increase even higher than last year’s? More importantly, what criteria was used in determining the MRA increase?
If the MRA continues to increase at its current rate of $4,500 a year, it will be $36,000 by 2013, instead of the originally scheduled sum of $25,000. This is 44 per cent more than when the MRA was first announced in parliament.
Last July, the CPF Minimum Sum (MS) was increased by $11,000, from $106,000 to $117,000.
With almost zero inflation last year, I hope that the MS will not also increase by $11,000 or more, come July this year, like the MRA.
Otherwise, at the current rate of increase of $11,000 per year, the MS will be $161,000 by 2013.
This means that Singaporeans with less than $197,000 ($161,000 MS plus $36,000 MRA) may only be able to withdraw $5,000 at age 55 from 2013, because of the gradual phase-out of the 50% Withdrawal Rule from1 January 2008.
According to the Longevity Insurance Committee’s report, only 60 per cent of Singaporeans are projected to have at least $67,000 in their CPF in 2013.
This begs the question of whether the CPF was initially designed as a welfare scheme for Singaporeans. After all, how many Singaporeans are projected to have more than $197,000?
Cartoon taken from CPF website.
Mr Leong,
Why is it that some people can have $37,000 in their Medisave account? Does this mean that the MRA is already higher than the originally scheduled sum of $25,000? Thanks
The truth is:
The govt takes the CPF as a taxation scheme.
They are inventing all kinds of reasons to keep your monies with them.
Keeping enough monies in medisave? wouldn’t have a medical insurance for critical illness be a more cost effective way?
who control medical cost? the hospitals? public hospitals are a major supplier of medical services so they have a lot of power setting prices.
What is stopping them to set prices that increase year on year?
especially when a large proportion of the MPs are doctors.
These doctors are motivated by the same desires to increase their earnings like everybody else.
I think every voter needs to wake up to the reality in Singapore:
we are expecting PAP to be a superman party when in fact, they are not.
They are ALL self serving individuals who have a goal of milking the system as much as possible financially.
They are not serious in developing Singaporeans.
Therefore, they need to be voted out and opportunity must be given to the opposition to do something tangible and provide incentives for these pigs to do the right thing.
they have been trying to lock our money in CPF with special and medisave new regulations, even the withdrawal limits have changed for insurance etc. these new regulations and conditions change on a yearly basis, sometimes twice a year and it is not made known to public but only at CPF website!!!
this is really sick, its our money but they keep changing the rules so that most of our money remain in their coffers.
hdb pricing is already out of controil and now they are eyeing our retirement money.
That is why most singaporeans saves alot, are asset rich but cash poor.
at the end of the day, we are nothing but slaves of the system.
“This begs the question of whether the CPF was initially designed as a welfare scheme for Singaporeans. ”
It’s not! This is a fund-raising scheme from the gahmen!
i can see that the CPF system is designed NOT with the intention to help Singaporeans save for retirement.
PAP kept increasing the minimum sum and coming up with new schemes to lock in our money. No wonder the chair of GIC Tony Tan was confident that GIC was in a “good shape” – it was assured of incoming funds from Singaporean sheep.
$37,000 is the Medisave Contribution Ceiling – any excess over this amount goes to the Special Acount
Leong Sze Hian
37K is going to change as well. it is going to be more.
One wonders if there are better way to run the show.
We should always remember this period of time.
At least we don’t hear a lot of crap talk about Singaporeans having a cheap govt (inexpensive etc) from all those self servicing ministers.
Especially, that was the time, they started neglecting productivity, leading to a 15 year period of continuous decline.
LHL is a real disappointment.
I think Khaw wants the increase in Medisave to cover funeral expenses as well.
Not surprise if khaw comes up with plan A,B,C,D, catering to how elaborate the funeral and send-off
will be……… And you chaps guessed it ! …….NTUC will be the appointed agent.
Afterall, PAP’s moto is to collect $$ when you are sick and collect the last $ when you are dead.
Health Minister Khaw Boon Wan said the current contribution rate of 6.5% to about 9% does not build up enough reserves to pay for both big medical bills and long-term care.
Medisave has been around for 25 years and was originally meant to pay for major hospital stays but its use has since been expanded to include some outpatient payments.
Mr Khaw said the current contribution rate is not enough to cover long-term healthcare bills.
“We’ve never priced that into Medisave contribution rate. So that’s a topic almost certainly I see a need for discussion during the upcoming Budget Debate,” he said
–
Why MM Lee never predicted this. Sleeping is it.
of course, he didn’t predicted this.
He didn’t see that he could lose monies in such a public way.
CPF is an indirect taxes. It charges the highest tax on all Singaporeans and PR, other foreigners are exempted from paying. Singaporeans are forever living in a losing game under PAP policies. It must be stopped at all cost.
The sad fact is, the lowest to lower paid are the ones most affected by CPF thingies.
More proportion of their salary is in there than the rich.
This population is not easily reached.
All the discussions here is meaningless if these cannot be reached.
Its been so long and this problem seems perenial. No Change, the way i see it.
Increasing medisave contribution may be a pretext to reducing ordinary account contributions inducing people to put more monies in to servicing housing.
Also, medisave minimum sum could be raised making it harder for people to withdraw monies because you need to meet this medisave minimum sum first before you can be considered meeting minimum sum that people is getting used to.
“We’ve never priced that into Medisave contribution rate……..for discussion during the upcoming Budget Debate”
Please, Mr. Health Minister, The Medisave thingy had been in existence for more than 2 decades!!
You mean you never discover this ‘flaw’ in the Medisave until now??
Come on, please don’t hoodwink the citizens!! We are not that stupid!!
The real reason ( i’m sure you know) is that the cost of medical care has gone up so bloody fast it’s
impossible for the current Medisave contribution to catch up!
You are barking up the wrong tree! If the cost of medical care keeps on going up at the current rate,
5 years down the road, we will be back to square one, and you will be singing a different tune to ask the poor citizens to further top up their Medisave account!!!
The right thing to do Mr.Minister for HEALTH, is to ask for only 1% point MORE over and above what has been alloted for the health-care budget against the GDP in the upcoming Budget Debate!!
Asking the citizens to keep topping up the Medisave a/c is NOT the way to go!!
And why should the citizens are the ones who always have to sacrifice in bad times??
Now the big question is have you got the guts and balls to ask and do the right thing in the upcoming Budget Debate!!
aiyoyo,
everything increase,
when can the people actually see & spend the hard cash they earned during their working life in the cpf?
blur leh
aiyoyo
How much is enough for MedicSave? The way the Health Minister is asking for increases almost every year is beyond logic . There are always people who can live with small medical expenses and also those who have to live with unbelivable amount of medical expenses. To peg the medical expenses at the high end i.e. those people who need a lot of medical expenses, will do a lot of injustices to people who needs more money to expend and less money for medical expenses. And the way medical expenses have been increasing (due to advanced equipment, testing and medical staff salary), and if we to benchmark all medical expenses to those heavy spenders, then no amount of CPF will be enough to cover the medicsave account
There are withdrawal limits for hospitalisation and surgery. Unless you have private insurance with riders, a portion of our hospital bills is PAID IN CASH even we have enough in medisave acct.
We certainly don’t mind if the increase in MA is contributed by employers (fat hope?). Otherwise, how does raising MA contribution rate help us if this means reducing OA which we use for our housing instalments??
CPF’s role in Singapore is probably outmoded and will become next generation’s dinosaur. It did serve my generation well…but it appears to be increasingly a liability to both the government and its citizen’s. I hope someone would be courageous enough to abolish the CPF bill and make it a voluntary scheme of some kind. Its time to think outside the box!