Our CPF MediSave Account follows us from cradle to grave.
Singaporean babies get their MediSave Account (MA) when they are born, and they receive an accompanying $4,000 MediSave grant.
At the opposite end of the spectrum, the government also regularly disburses grants to elderly Singapore via MediSave top-ups. This is to support them in their senior years, especially as healthcare expenses become more relevant. For example, eligible elderly Singaporeans receive a part of their permanent GST Voucher payouts in their MediSave Accounts each year. Most recently, in Budget 2023, the government also committed to an Assurance Package MediSave payout of $150 a year from 2023 to 2025 for those 55 and above (and those aged 20 and below).
This also leads in nicely to the point of this article – a guide on our MediSave Account and what we can use it for.
MediSave Account Was Implemented On 1984
While it may feel like our MediSave Account has always been around, it was only introduced on 1 April 1984. Before then, we only had our Ordinary Account and Special Account (which itself was introduced in 1977). Our Retirement Account came slightly later, in 1987.
We Earn A Floor Interest Rate of 4.0% On Our MediSave Account
While many will know that our MediSave Account savings earn a return of 4.0% per annum, this is just a floor rate – that was introduced in 2001. We can actually earn a higher return.
Interest rates for our MediSave Account balances follow a formula – and if it is lower than the calculated interest rate, then we will get the 4.0% floor rate.
MediSave Account interest rates are calculated using the average yield of the 10-year Singapore Government Securities (SGS) plus 1.0%. Using this formula, the current MediSave Account interest rate would be 3.81%. Since this is lower than the floor rate, we continue to enjoy the 4.0% interest returns.
The last time that our MediSave Account earned higher than 4.0% floor rate was in 1999. With the rising interest rate environment, we may see CPF interest rates rise across the board in the coming months.
We Contribute 8% To 10.5% Of Our Monthly Salary To Our MediSave Account
Each month, we contribute up to 37% of our monthly salary to our CPF accounts. The older we are, the lower our CPF contributions. These contributions are further split into three CPF accounts – Ordinary Account, Special Account and MediSave Account. We do not make any direct salary contributions to our Retirement Account.
Depending on how old we are, we contribute between 8% to 10.5% of our monthly salary into our MediSave Account.
As we can see in the table below, our contribution rate to MediSave Account rises as we age. This is understandable, as our healthcare needs will likely rise when we get older – and see our health deteriorating.
|Age Band (Years)||Approx. Allocation Rates (for monthly wages ≥ $750)|
|Ordinary Account (% Of Wage)||Special Account (% Of Wage)||Medisave Account (% Of Wage)||Total (% of Wage)|
|35 and below||23||6||8||37|
|Above 35 to 45||21||7||9||37|
|Above 45 to 50||19||8||10||37|
|Above 50 to 55||15||11.5||10.5||37|
|Above 55 to 60||12||7.0||10.5||26|
|Above 60 to 65||3.5||6.5||10.5||16.5|
|Above 65 to 70||1||4||10.5||12.5|
The Basic Healthcare Sum (BHS) Is The Maximum Amount That We Can Save In Our MediSave Account
Regardless of our age, the maximum we can have in our MediSave Account is $68,500 – the Basic Healthcare Sum (BHS) in 2023.
The BHS increases each year – as it tries to account for the rising cost of healthcare and healthcare inflation in Singapore. While the BHS will increase every year, our own BHS is locked-in once we turn 65.
For those who have hit their BHS, interest returns or monthly CPF contributions to their MediSave Account will instead flow into their Special Account, up to the Full Retirement Sum (FRS), or Retirement Account, up to the Enhanced Retirement Sum (ERS).
We Can Make Voluntary Top-Ups To Our MediSave Account (And Save On Taxes)
We can boost our healthcare adequacy by topping up our MediSave Account. Again, we can only top-up our MediSave up to the Basic Healthcare Sum (BHS).
We also enjoy a dollar-for-dollar tax benefit on our MediSave Account top-ups, up to $8,000 a year. This cap is shared with the Retirement Sum Topping Up (RSTU) to our Special Account. We can also top-up another $8,000 to our loved ones MediSave Account or Special Account for another up to $8,000 tax relief a year.
Read Also: Complete Guide To CPF Retirement Account
We Can Use MediSave To Pay For Our MediShield Life And Integrated Shield Plan Premiums
MediShield Life is a basic health insurance plan that covers all Singaporeans. As coverage commences from the day we are born, premium payments also start.
Regardless of what age we are, we can use our MediSave Account savings to fully pay for our MediShield Life premiums (which increase as we age).
Source: Ministry of Health (MOH)
As MediShield Life only provides sufficient coverage for large hospital bills in subsidised Class B2 and C wards, we may wish to get additional private insurance coverage. We can buy an Integrated Shield Policy (IP) for this.
IP premiums can be substantially higher, depending on the exact coverage we choose. We can also tap on Additional Withdrawal Limits from our MediSave Account to pay for our IP coverage:
|Age on next birthday||Additional Withdrawal Limit for Integrated Shield Plan (IP) Policyholders|
|1 to 40||$300|
|41 to 70||$600|
|71 and above||$900|
We Can Also Use MediSave To Pay For Our CareShield Life And CareShield Life Supplement Plan Premiums
CareShield Life is our national long-term care insurance plan. It provides basic financial protection should we ever become severely disabled.
CareShield Life, which replaced the old ElderShield scheme, comes into effect when we turn 30 years old. We can also buy CareShield Life supplement plans from private insurers.
Premiums for CareShield Life only start when we turn 30 and end when we turn 67. This means premiums are pre-funded during our working years, to enable lifelong coverage even after we stop working in our senior years.
Information on CareShield Life premiums is hard to source online, even on government websites. This may be because there are a variety of transitional subsidies and premiums differ for males and females. We looked at one of our own older articles for an illustration of premium amounts. Premiums for a 30-year-old male started at $206 in 2020. We’re also told that premiums go up by about 2% each year, in order to increase payouts by the same amount.
We can use our MediSave Account savings to pay for our CareShield Life premiums. Similarly, we can also buy a CareShield Life supplement plan. We can use up to a limit of $600 a year for our CareShield Life supplement plans.
We Can Use Our MediSave Account Savings To Pay For Our Loved Ones Healthcare Needs
We can use our MediSave Account savings to pay for the healthcare needs, including healthcare insurance premiums, of our loved ones, including:
They can also be of any nationality, except for grandparents and siblings, who must be Singapore Citizens or Permanent Residents (PRs).
Our MediSave Account savings can be used to:
Pay For Outpatient Treatments
We can use our MediSave Account savings for:
- Chronic conditions, such as diabetes, hypertension, stroke, mental health conditions, asthma, dementia, epilepsy, gout and others
- Children’s health screenings and vaccinations under the National Childhood Immunisation Schedule (NCIS)
- Vaccinations under the National Adult Immunisation Schedule (NAIS) that protect you against infectious diseases
- Health screenings, such as mammograms
We can view the full list of conditions that are supported on the CPF website.
Those 60 and over can also make use of up to $300 per annum under the Flexi-MediSave scheme. This can be used to pay for outpatient medical treatments at polyclinics, public hospital SOCs, and participating CHAS GPs.
We can also use $300 to pay for outpatient scans, such as CT scan and MRI scans at SOCs and polyclinics to diagnose or treat your medical condition.
MediSave can also be used to pay for prolonged, regular treatments required for certain conditions, which may be costly over time:
- Cancer treatments (on the Cancer Drug List), subject to a limit of $600 or $1,200 per month per patient
- Radiotherapy treatments, limited to $80 – $2,800 per treatment
- renal dialysis treatment up to a limit of $450 per month per patient.
- outpatient intravenous antibiotic treatment at SOCs, up to a limit of $600 per weekly cycle, up to $2,400 per annum.
There are also other outpatient uses, which we can review on the CPF website.
We can also use our MediSave Account savings, up to $6,000, $5,000 and $4,000, for the first, second and third (and subsequent) treatment cycles for Assisted Conception Procedures (ACPs), subject to a lifetime limit of $15,000 per patient.
Pay For Inpatient Treatments
While MediShield Life provides insurance coverage for our inpatient treatments, there will typically be a co-sharing component of the bill. This is where we can tap on our MediSave Account savings to pay for the co-sharing portions of our bills.
For hospitalisation, we can use up to $550 a day for the first two days, and $400 per day thereafter, for hospital charges. This includes daily ward charges, daily treatment fees, investigations, and medicines.
For day surgeries, we can use up to $300 a day for hospital charges.
Besides hospital charges, we will also incur surgery charges. For this, we can also tap on our MediSave Account savings. We can use between $250 and $7,550, depending on the complexity of the surgery. The withdrawal limits are based on a fixed limit from the Table of Surgical Procedures (TOSP).
When having a child, we can also tap on the MediSave Maternity Package (MMP). We can use up to $900 for pre-delivery expenses, including consultations, tests, and medications. We can also use up to $550 a day for the first two days, and $400 a day thereafter, pay for hospital charges. We can also pay for the delivery procedure:
– up to $750 for a natural delivery
– up to $2,150 for a caesarean delivery
– up to $2,600 for a complicated caesarean delivery
Pay For Long-Term Care
We have to note that we only start receiving CareShield Life payouts if we cannot perform 3 out of 6 Activities of Daily Living (ADLs). Moreover, we only receive about $600+ each month from CareShield Life payouts, and may require more for our care. For this, we can continue to tap on our and/or our loved ones’ MediSave Account.
We can use MediSave Account savings for Rehabilitation, Palliative Care, and Disability Care.
For rehabilitative care, we can use MediSave Account savings for:
– An inpatient at an approved community hospital (for $250 per day, up to $5,000 per annum)
– An inpatient at an approved convalescent hospital (for $50 per day, up to $3,000 per annum)
– An outpatient at a day rehabilitation centre (for $25 per day per rehabilitation service, up to $1,500 per annum)
– An outpatient at an approved day hospital (for $150 per day, up to $3,000 per annum)
For palliative care, we can use MediSave Account savings for:
– Inpatient palliative care providers (for $250 per day for general palliative and $350 per day for specialised palliative)
– Home palliative care/day hospice care (up to $2,500 per lifetime, per patient). If you have terminal cancer or end-stage organ failure, there will not be any withdrawal limit if the bill is paid using your own MediSave.
For disability care, those above 30 and assessed to be severely disabled can withdraw up to $200 a month from our or our loved ones MediSave Account under MediSave Care. Do note that we will need a minimum of $5,000 in our MediSave Account to start making MediSave Care withdrawals.