On 20 August 2023, Prime Minister Lee Hsien Loong delivered his National Day Rally (NDR) speech. He started the English Speech by outlining the grim realities that our unlikely nation must face.
He spoke about international geopolitical tensions and supply chain disruptions, adding that globalisation is weakening with many countries are layering on protectionist measures. PM Lee also touched on climate change, saying that food production will inevitably be affected, and hinted at rising prices.
In Singapore, we hope to avoid a recession. Even though inflation has come down, it will likely stay higher than what most of us have become accustomed to. Nevertheless, cost of living remains on our minds.
With that, PM Lee also expressed that financial concerns are top-of-mind, for both young and older workers. Here are 5 measures PM Lee announced that will financially impact Singaporeans.
#1 Majulah Package To Help “Young Seniors” Meet Retirement Needs
Those in their 50s and 60s may have children who are still not financially independent, and living with them, as well both elderly parents they have to take care of.
This is why the Majulah Package will apply to those born in 1973 or earlier – which makes them 50 and above this year. The Majulah Package comprises 3 components: 1) Earn & Save Bonus; 2) Retirement Savings Bonus (RSB); and 3) MediSave Bonus.
The Earn & Save Bonus will give lower and middle-income workers a CPF bonus of between $400 and $1,000 a year, depending on their income. The Government will credit this amount, on a yearly basis, into their CPF accounts, on top of their usual Employer and Employee CPF contributions.
Since young seniors will only get the Earn & Save Bonus if they are working, this will potentially encourage this group to continue working as long as they can. This will also build up their retirement adequacy.
Those who have not reached their CPF Basic Retirement Sum (BRS) will get a one-time Retirement Saving Bonus (RSB) CPF top-up of between $1,000 and $1,500. For reference, the BRS is $99,400 in 2023.
Even those who are not working will enjoy the RSB, which includes homemakers and those unable to work.
Young seniors also stand to receive MediSave Bonus of between $500 and $1,000. PM Lee mentioned that while most young seniors have enough MediSave balances, they still worry about healthcare costs, especially as they age. This will give them a buffer for their to pay for medical expenses and insurance premiums.
#2 “Older Seniors” Will Also Be Encouraged To Continue Working
PM Lee concluded the Majulah Package announcement by saying that it will also cover the Pioneer Generation and Merdeka Generation. The intention is to encourage even older workers to continue working as long as they can.
This will be in addition to the Pioneer Generation and Merdeka Generation benefits that they are already receiving.
In total, the Majulah Package will cost $7 billion and benefit 1.4 million older Singaporeans. PM Lee said that the government will create a new fund to meet the full lifetime cost of the package from this term of government. This means that future generation of Singaporeans will not be burdened by this package.
This will also be used to enhance support under the existing Silver Support, Workfare and the Matched Retirement Savings Scheme (MRSS). PM Lee promised that details for these will be announced next year.
#3 EASE 2.0 To Expand Suite Of Fittings – To Make Homes Even More Senior-Friendly
To enable seniors to age in the comfort of their homes, HDB’s EASE (Enhancement for Active Seniors) programme provides up to 95% subsidies to make homes more senior-friendly.
Some of the eligible home improvement works to make HDB flats more senior-friendly include slip-resistant treatment for bathroom floor tiles, grab bars in the toilet, and wheelchair ramps.
PM Lee announced an expanded suite of fittings under EASE 2.0 to make living at home safer and more comfortable for seniors. Some examples of the expanded fitting were foldable shower seats, and widened toilet entrances.
PM Lee also went on to detail plans to make “Singapore a more friendly home for current and future seniors” under an Age Well SG programme.
They include investing resources to senior-proof homes, making neighbourhoods easier and safer to navigate, and building more assisted living residences with integrated accommodation, care and community facilities. This will start with towns with more seniors, such as Ang Mo Kio and Bukit Merah.
#4 Standard, Plus And Prime BTO Classification To Replace Mature VS Non-Mature Estates
During the National Day Rally, PM Lee introduced a “Plus Project” classification. This will be an extension to the current “Standard Projects” and the relatively new “Prime Projects” (i.e. the Prime Location Public Housing model).
This will replace the existing mature vs non-mature classification, as its relevance is diminished. PM Lee alluded to Tengah being the only non-mature estate, which then means all other BTOs are being built mature locations.
We can think of Standard projects as the base case for all BTO flats. I.e. those who buy such flats have a 5-year Minimum Occupation Period and there is no income ceiling for resale buyers.
Those who buy Plus Projects are buying projects that are in a good location within a certain housing estate. PM Lee gave two examples, one in Ang Mo Kio beside the MRT station and another in the upcoming Bayshore estate, which will be near two MRT stations and potentially have sea views.
Plus Projects will have longer MOP of 10 years, require a subsidy recovery upon resale and impose an income ceiling for resale buyers. The subsidy recovery is to take back the initial subsidy given on the flat to moderate the selling price. More details will be announced on this scheme.
Prime Projects are typically in the best locations in Singapore, often close to the CBD.
PM Lee also reassured homeowners that there will be no reclassification of existing flats or flats that have been booked. And, he also mentioned that this new classification will impact every new buyer in the future.
#5 Singles Can Now Buy For 2-Room Flexi Flats Across All BTO Projects
Currently, singles, who are above 35 and wish to apply for a BTO flat, can only apply for a 2-room flexi flat in a non-mature estate.
During his National Day Rally speech, PM Lee announced that singles will be allowed to buy 2-room flexi flats across all BTO projects (i.e. Standard Projects, Plus Projects, and Prime Projects).
While this may not change the size of the home they can buy, it will definitely offer more choices for singles who wish to buy their own flats.
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