Singapore Budget 2015: Medisave Minimum Sum requirement to be scrapped next year

Monday, 29 June 2015

Singapore Budget 2015: Medisave Minimum Sum requirement to be scrapped next year

Singapore Budget 2015: Medisave Minimum Sum requirement to be scrapped next year

Singapore Budget 2015: Medisave Minimum Sum requirement to be scrapped next year

The Medisave Minimum Sum requirement will be scrapped from next year so people will no longer need to top up their accounts to this amount - which now stands at $43,500 - before they can withdraw their CPF monies at the age of 55. -- PHOTO: BT FILE

SINGAPORE - From next January, people no longer need to have a minimum sum in their Medisave account before they can withdraw their Central Provident Fund (CPF) savings at age 55.

The requirement will be scrapped.

Currently, the stipulated amount is $43,500, and those with less have to top up their Medisave with money from the Ordinary Account in their CPF.

The change, announced by Health Minister Gan Kim Yong in Parliament yesterday, affects many people, as almost half of those who turn 55 currently do not have this sum in their Medisave.

But the maximum sum for Medisave will not be scrapped, Mr Gan said in his reply to Dr Chia Shi-Lu (Tanjong Pagar GRC), chairman of the Government Parliamentary Committee for Health.

This sum, which will be raised annually to keep pace with the higher draw on Medisave by the elderly, will go up from $48,500 today to $49,800 next January.

Excess amounts will be moved to the Special and Retirement Accounts.

Mr Gan also said the Medisave maximum sum will be renamed Basic Health-care Sum from next January and will be fixed for each cohort when they turn 65, with no subsequent changes in their lifetime.

At present, any increase in the maximum sum applies to everyone, regardless of age.

The changes are part of a move to improve the Medisave scheme, said Mr Gan.

The first step was taken in January this year, he added, when the Medisave contribution rate of employers was increased to help Singaporeans save more for their health-care needs.

Another major change he announced concerns the amount of Medisave people can use to pay for the premiums of the private health insurance they buy. These schemes incorporate the basic MediShield insurance.

Now, the maximum they are allowed to use from Medisave for these Integrated Shield Plans (IPs) is a flat rate of $800 for people aged 65 and younger, rising to $1,400 for those aged 81 or older.

After MediShield Life replaces MediShield later this year, the amount that can be used for IPs will be tiered according to age groups. For the basic MediShield Life, there will be no limit on the use of Medisave for the premiums.

Mr Gan said: "We will have to balance between helping Singaporeans pay for their IP premiums using Medisave, and ensuring that Medisave is adequately preserved for health-care needs, especially for the lower- income."

Several MPs, including Dr Chia and Non-Constituency MP Lina Chiam, asked for Medisave to cover more chronic ailments.

Mr Gan said it will not include eczema, which Mrs Chiam had asked for. But he assured her there is subsidy for its treatment and financial help for those who still cannot afford to pay.

But from June 1 this year, Medisave can be used to pay for treatment of four more conditions: epilepsy, osteoporosis, psoriasis and rheumatoid arthritis. It brings to 19 the number of chronic conditions covered by Medisave.

The amount allowed is up to $400 a year. But people aged 65 and older can use an additional $200 from next month.

The various moves are part of a masterplan to build a quality health-care system that will be sustainable in keeping Singaporeans healthy, said Mr Gan.

"We have made a lot of progress... but we must also look ahead into the future," he added.

The Straits Times / Singapore Published on Thursday, 12 March 2015

By Salma Khalik, Senior Health Correspondent

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