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This is how the government is spending $9 Billion on Pioneer Generation

How an average of $20,000 allotted for each Singaporean aged 65 and above will be used.

The setting up of a $9 billion healthcare fund exclusively for Singaporeans aged 65 and above, coined “The Pioneer Generation”, has received the most media publicity when the budget was announced.

According to published statistics, about 450,000 Singaporeans will benefit from this Pioneer Generation Package. Simple mathematics works this out to about $20,000 per person, likely to be funded by an increase in taxes.

The mainstream media has described this $9 billion fund as the “largest one-off special transfer for a single measure ever booked in a budget here”. What this means is that the monies for the fund have been set aside and will be paid out, regardless of whether the existing government continues to remain in power. The fund is expected to be sufficient to last up till the last remaining individual of The Pioneer Generation passes on.

What $9 Billion Buys The Pioneer Generation

Or phrased better, what does $20,000 per person buy in terms of healthcare support.

I. Annual Mediasave top-ups of between $200 to $800.

Based on a life expectancy of 85 years, the monetary value of this is about $4000, lesser if you were to present value the amount.

II. Provision of subsidy for Medishield premium.

Ranges from 40% discount for those aged 65 (about $216 in savings per year) to a 60% discount for those aged 90 (about $714 in savings per year). The cost of these subsidies for the Medishield premium is deceptively high and should not be underestimated.

III. Further Discount at Polyclinics & Outpatient Clinics.

Based on an example provided from The Straits Times, this can be about $150 per year.

IV. Disabilities assistance of $1200 a year

For those who need assistance for three out of the six activities relating to daily living: Washing, Dressing, Feeding, Toileting, Mobility & Transferring.

V. Other ancillary items such as Community Health Assist Scheme (CHAS)

Based on an example provided from The Straits Times, this can be about $250 per year.

Total annual incentive for a 65-year old person who is not disabled but has some health concerns that warrants medicines and regular check-ups: $816.


What Else Can $9 Billion Buy For You In Singapore

$9 billion dollars is a lot of money and to put it into perspective, here is what it can buy us in Singapore.

1. About 70,000 Normal Sized HDB Flats (Based on approximate cost from HDB Contracts Awarded). And if you build HDB studio apartments instead, you probably can afford to purchase more units.

2. About $3800 per Singapore Citizen of voting age. If you use the money wisely and buy yourself a bluechip stock such as StarHub. It will provide you with dividends of about $200 annually.

3. Free train rides for all commuters for the next 15 years.


What If $9 Billion Dollars Is Used To Provide Medisave Top-Ups?

If the government were to decide to simply inject in the equivalent value of the subsidy to top-up the Medisave Account of the Pioneer Generation, each of our pioneers will get a whopping $20,000 in their account. An annual interest of about $800 would be earned and this should be sufficient to pay for the premium of of Medishield up till the age of 78 without any drawdown.

We can’t speak for everyone, but we sense that most people would rather take an injection of $20,000 into their medisave account immediately, and to utilise the interest earned to offset the cost of healthcare.

However, this is up to perception and there is always the possibility that some might incur higher health care costs compared to others.


Will The Mentally Challenged Be Covered Under MediShield?

One contentious area about health care frequently overlooked is whether Singaporeans who are born mentally challenged fall within the scope of Medishield (e.g. if they were to be hospitalised for a serious illness, will Medishield cover them or do their families pay their potentially hefty bills?).

Our understanding was that this was a previously excluded area. We are not sure if this has been changed since. This is an area worth looking at, since insurance companies do not cover this group of individuals.


This article was written for and first appeared on

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