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HOW WILL THE CPF CHANGES AFFECT YOU?

Changes to the CPF were announced at the recent Budget 2007 on 15 February. Are you aware of what these changes are? We bring you an overview of how the upcoming CPF changes will affect you

Increase in employer CPF contribution by 1.5 percentage points

From 1 July, the employer CPF contribution will increase by 1.5 percentage points. This would mean more retirement savings for you. One percentage point will go into the Ordinary Account while the remaining 0.5 percentage point will go into the Medisave Account. This applies to all working CPF members, except those who are above 35 years old and earning $1,500 or less. For this group of workers, their CPF savings will instead be supplemented by the Workfare Income Supplement (WIS).

Higher take-home pay for low-wage workers

Currently, you are required to contribute CPF when your monthly income exceeds $500. From 1 July, if you earn between $500 and $1,500 per month, your employee CPF contribution rate will be phased in from 0% to the full rate. This will give you a higher take-home pay for your living expenses.

Employee CPF Contribution Rate

Age   Income    50 years or below Above 50 – 55 years Above 55 – 60 years Above 60 – 65 years Above 65 years >$500 - $1,500 Phase in* from 0% to 20% Phase in* from 0% to 18% Phase in* from 0% to 12% Phase in* from 0% to 7.5% Phase in* from 0% to 5% More than $1,500 20% 18% 12.5% 7.5% 5%

*More information will be available at a later date

Better employability for older low-wage workers

Currently, employers pay the full rate of 13% when wages exceed $50 for workers aged up to 50. From 1 July, if you are above age 35 with monthly income of $1,500 or less, your employer CPF contribution rate will be phased in from 0% at a monthly wage of $50 till it reaches the full rate at a wage level of $1,500. This will make older low-wage workers more employable. Older low-wage workers, whose CPF contributions will be reduced due to the CPF changes, may receive the WIS to supplement their wages and savings.

Employer CPF Contribution Rate

Age   Income    35 or less Above 35 – 50 years Above 50– 55 years Above 55 – 60 years Above 60 years >$50 - $1,200 14.5% Phase in* from 0% to 13% Phase in* from 0% to 9% Phase in* from 0% to 6% Phase in* from 0% to 3.5% >$1,200 - $1,500 14.5% Phase in* from 13% to 14.5% Phase in* from 9% to 10.5% Phase in* from 6% to 7.5% Phase in* from 3.5% to 5% More than $1,500 14.5% 14.5% 10.5% 7.5% 5%

*More information will be available at a later date

Reduced Medisave contribution rates for low income self-employed

If you are a a self-employed person, you are required to contribute to Medisave if your net trade income is above $6,000 per year. The Medisave contribution rate will be reduced for low-income self-employed persons to encourage more to contribute Medisave for their healthcare needs.

Medisave Contribution Rate for Self-Employed

Annual Net Trade Income	Below age 35	Age 35 to below 45	Age 45 and above
< $6,000	Voluntary Contributions at 1/3 of the full rate	Voluntary Contributions at 1/3 of the full rate	Voluntary Contributions at 1/3 of full rate
> $6,000 - $12,000	1/3 of the full rate	1/3 of the full rate	1/3 of the full rate
> $12,000 - $18,000	Phase in* to full rate	Phase in* to full rate	Phase in* to full rate
> $18,000	6.5%	7.5%	8.5%

GET AN SMS ALERT FOR THE MONTHLY CREDITING OF YOUR CPF CONTRIBUTIONS

Wish to be informed when your CPF contributions are credited to your CPF account? Just sign up for our free notification service and receive an SMS alert when your CPF contributions are credited. Visit the CPF website for more information on the other SMS services. To register for the SMS services, please go to www.myecitizen.sg.

MORE CPF TRANSACTIONS AVAILABLE AT AXS STATIONS NOW

You can now perform 15 CPF transactions at any of the AXS Station islandwide. These include making voluntary contributions, paying premium shortfall for your Home Protection Scheme cover and repaying your education loan. Look out for more CPF services at all AXS stations in future for your convenience.