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Guide To HDB Silver Housing Bonus Scheme, And How It Can Help You (Or Your Parents) With Retirement

The Silver Housing Bonus is an excellent way to for lower-and-middle income elderly Singaporeans to get more money each month for their retirement.


In March 2020, the HDB Silver Housing Bonus (SHB) scheme was enhanced to provide elderly Singapore households with greater financial support for their retirement. In this article, we will explain how the Silver Housing Bonus scheme works, who is eligible for it, and how it can support you (or your parents) during retirement.

How Does The Silver Housing Bonus (SHB) Work?

The Silver Housing Bonus (SHB) scheme provides elderly Singapore households with a cash bonus when they right-size to a 3-room or smaller flat, which can be bought either from HDB or the resale market. To qualify for the SHB, each senior household is required to top-up $60,000 from the proceed of the sale of their existing home into their CPF Retirement Account and join CPF LIFE.

When you top-up $60,000 to your CPF Retirement Account, you will receive the maximum cash bonus of $30,000. If you are not able to top-up the full $60,000, you will receive a pro-rated cash bonus based on a 1:2 ratio (i.e. $1 cash bonus for every $2 top-up made).

Who Is Eligible For The Silver Housing Bonus (SHB)?

To be eligible for the Silver Housing Bonus (SHB), homeowners have to meet the following criteria.

  • At least one owner has to be a Singapore Citizen aged 55 and above.
  • Gross monthly income for the household must be below $14,000.
  • The existing property they own must be an HDB flat, or a private property with an annual value of $13,000 or less.
  • Homeowners cannot have concurrent ownership of a second property.
  • You must sell your existing property and purchase a 3-room or smaller HDB flat, either directly from HDB or the resale market.

How Much Top-ups Can You Make?

Ideally, you want to make a top-up of $60,000 to your CPF Retirement Account to receive the maximum cash bonus of $30,000. However, this may not always be the case.

To qualify for the Silver Housing Bonus (SHB), top-ups made to your CPF Retirement Account need to be from the proceeds of the sale of your existing home.

This is calculated based on the selling price of your existing home, less 1) any outstanding housing loan, 2) the purchase price of your next HDB flat (which has to be a 3-room or smaller flat) and 3) any resale levy, if applicable.

Example 1: Sufficient Proceeds

Selling Price Of Existing Property $420,000
Less
Outstanding Housing Loan
 

$0

Purchase Price Of Next Flat $300,000
Resale Levy $0
Proceeds $120,000
Top-up Required $60,000
Cash Bonus $30,000

 

Example 2: Insufficient Proceeds

Selling Price Of Existing Property $350,000
Less
Outstanding Housing Loan
 

$100,000

Purchase Price Of Next Flat $200,000
Resale Levy $0
Proceeds $50,000
Top-up Required $50,000
Cash Bonus $25,000

 

Example 3: No Proceeds

Selling Price Of Existing Property $247,000
Less
Outstanding Housing Loan
 

$76,000

Purchase Price Of Next Flat $141,000
Resale Levy $30,000
Proceeds $0
Top-up Required $0
Cash Bonus N.A

 

Here are some items to note.

Insufficient proceeds: If you do not have sufficient proceeds from the sale of your flat, you cannot choose to make an additional top-up to get the full SHB cash bonus. In the case of example 2, after selling their existing property ($350,000) and paying off their outstanding housing loan ($100,000) and the purchase of their new flat ($200,000), the proceeds is $50,000. In this case, the couple will receive $25,000 in cash bonus. They cannot choose to voluntarily top-up another $10,000 to receive the remaining $5,000 in cash bonus.

Proceeds capped by prevailing Full Retirement Sum (FRS): Proceeds made for SHB is meant for your Retirement Account but capped by the prevailing FRS.

You must purchase a 3-room or smaller flat: To qualify for the SHB, you must buy a 3-room or smaller flat. You cannot buy a flat which is 4-room and bigger or choose not to buy an HDB flat.

How Does The Silver Housing Bonus (SHB) Scheme Support Your Retirement?

The Silver Housing Bonus (SHB) scheme is particularly useful for elderly Singaporeans who own a large HDB flat they no longer need, and who do not feel they have enough retirement income.

For example, a Singaporean couple, both aged 55 in 2020, who currently have $50,000 each in their CPF Retirement Account, will receive about $485 to $531 via CPF LIFE each month from age 65 onwards.

By utilising the Silver Housing Bonus (SHB) to the fullest, they will each receive an additional $45,000 ($90,000 in total) in their CPF Retirement Account, giving themselves a total of $95,000, in each of their CPF Retirement Account. This will increase their monthly lifelong payout to about $819 to $901 from age 65 onwards.

Read Also: Thinking Of Monetising Your HDB Flat To Support Your Retirement? Here’s A Complete Guide To All The Options Available

 

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