Those of us who were eligible to receive this year’s GST Voucher would already have received the money earlier this month. The amount, ranging from $150 to $600, would have come at a timely festive period where we can use it to pamper ourselves as we celebrate the joyous Golden Jubilee of Singapore.
For those who are 66 and above (i.e. the Pioneer Generation), the Ministry of Finance will be disbursing another tranche of GST Voucher – Cash in November. In addition, there will also be Medisave top-ups along the way for eligible people who are 56 and above.
My parents are age 56 to 65 in 2015, how much more will they get?
In addition to the $300 GST Voucher – Cash that had been disbursed, they will obtain additional annual Medisave top-ups from 2014 till 2018.
The amounts will either be $100 or $200, depending on the value of the property they own. About 528,000 Singaporeans are expected to enjoy this benefit.
My parents are age 66 and above in 2015, how much more will they get?
Those that were eligible would have received $600 on 1st August. An additional amount of $300 will be given in November 2015. This will bring the total cash amount to $900.
In addition, the Ministry of Finance will be topping up between $200 to $800 to the Medisave Account of our pioneer generation. This will help provide some cushion to older Singaporeans whenever they require medical aid.
Table 1: Annual Medisave Top-ups
Source: Ministry of Finance, Singapore
This Medisave top-up is not a new policy. In fact, it was actually announced during the 2014 budget as part of the $9 billion pioneer generation healthcare fund.
What Is The Best Use Of The Medisave Top-Up?
The Medishield Life is an initiative by the Ministry of Health, which provides basic health insurance. This health insurance will help in subsidising our hospitalization bills.
This scheme will be compulsory for every Singaporean from November 2015 onwards. Premiums will be deducted from your Medisave account. Therefore, to ensure that the pioneer generations are protected from hefty hospitalization bills, the Medisave top-ups would be best used to pay for this national health insurance scheme
Will the top-ups be sufficient to cover the Medishield Life premiums?
Using Ministry of Health’s Medishield Life Premium Calculator, we input the following
1) Annual value of our home: <$13,000
2) Household monthly income per person: $0
3) Citizenship: Singaporean
4) Date of birth: <<Please refer to the table below>>
5) Pioneer generation: Yes
6) Ownership of more than 1 property: No
Table 2: Estimated Medishield Life Premiums for Pioneer Generation
Source: Ministry of Health, Medishield Life Premium Calculator
Medishield Life premium begins at $489 for those who are between the ages of 66 to 69 based on the above-mentioned inputs. For people in this age group, the $200 per year top up would help them reduce their annual premiums by about 40% (i.e. they only pay about $289 instead of $489).
Based on the figures we have calculated, the annual Medisave top-ups should be sufficient to reduce Medishield Life premiums in the initial years of the pioneer generation, and eventually, fully subsidizing the premiums as the person gets older. For example, a person who is 81 this year will receive $800 in annual Medisave top-up but only need to spend $566 on the premiums for Medishield Life.
In a nutshell
The main purpose of all this is to help the middle and lower income Singaporeans, with those from the Pioneer Generation benefiting the most. Healthcare, in particular, is gaining the most amount of attention and in our opinion, rightfully so.
As medical cost are constantly rising in Singapore, the most effective way to make full use of the Medisave top-ups by will be to use it to pay for the compulsory healthcare insurance.
DollarsAndSense.sg is a website that aims to help people make better financial decisions.
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