CHANGES TO THE CPF MINIMUM SUM, MEDISAVE MINIMUM SUM, MEDISAVE CONTRIBUTION CEILING AND THE CPF MINIMUM SUM TOPPING-UP SCHEMES
	News Release by: Central Provident Fund Board 09 June 2005 --
	The CPF Minimum Sum, the Medisave Minimum Sum and the Medisave Contribution Ceiling will be raised with effect from 1 July 2005. The criteria for top-ups under the CPF Topping-up Scheme will also be liberalized.
	CPF Minimum Sum
	The CPF Minimum Sum will be increased from $84,500 to $90,000. The new amount will apply to CPF members who turn 55 from 1 July 2005 to 30 June 2006. CPF members who set aside the $90,000 Minimum Sum fully in cash will receive a monthly payout of $711 from age 62 for about 20 years. This increase is in line with the announcements in August 2003 that the CPF Minimum Sum will be raised gradually to reach $120,000 (in 2003 dollars) in 2013. The increase in Minimum Sum, which includes an adjustment for inflation, is to ensure that Singaporeans set aside sufficient savings for their retirement. Medisave Minimum Sum and Contribution Ceiling The Medisave Minimum Sum will be increased from $25,500 to $27,500. This amount will apply to members who withdraw their CPF at or after 55 years of age with effect from 1 Jul 2005. The Medisave contribution ceiling will be also raised from $30,500 to $32,500. This amount is the maximum balance each member may have in his Medisave Account1. The revision in Medisave Minimum Sum and Medisave Contribution Ceiling is to ensure that Singaporeans have sufficient savings to meet their hospitalisation expenses, and have been adjusted for inflation. 1Any Medisave contribution in excess of the prevailing Medisave Contribution Ceiling will be transferred to the Ordinary Account. CPF Minimum Sum Topping-Up Scheme As announced by the Prime Minister and Minister for Finance in his Budget speech in Feb 2005, the criteria for top-ups under the CPF Topping-up Scheme will be liberalized. This is to enable more members to receive CPF top-ups from their family members in order to meet their retirement needs. The changes are as follows: a. Members will be able to use their CPF to top up their parents' or spouses' Retirement Accounts as long as their net balances in their Ordinary and Special Accounts (including amounts used from these accounts under the CPF Investment Scheme) are more than 1.5 times the prevailing Minimum Sum.     b. The new topping-up limit for recipients will now be based on their cohort’s Minimum Sum less their net balances in their Ordinary and Special Accounts (including amounts used from these accounts under the CPF Investment Scheme) and Retirement Account. Amounts withdrawn under the CPF housing schemes will be excluded from the computation. The condition that members who wish to receive top-ups must be above the age of 55 will remain. Those who wish to top up to their spouse’s, parents’ or grandparents’ Retirement Accounts with cash will enjoy a tax relief of up to $7,000. However, to qualify for tax relief for cash top-ups for spouses, the spouse must earn $2,000 or less in the preceding year. Please refer to Annex A and B for examples of top-ups under the revised criteria and the current criteria respectively. Details of the CPF Minimum Sum Topping-Up scheme are available in the online Minimum Sum Scheme handbook.
	PUBLIC ENQUIRIES
	Members with enquiries may call the CPF Call Centre on 1800-227 1188
	ANNEX A:
	EXAMPLES OF TOP-UPS UNDER THE REVISED CPF MINIMUM SUM TOPPING-UP SCHEME Example 1 A member decides to make a top-up (using CPF) for his parents. Assuming the Minimum Sum is $90,000, the table below shows the amount available for topping-up after the change of rule. a. Net Ordinary Account (OA) and Special Account (SA) balances $55,000 b. Amount of CPF withdrawn for investment $120,000 c. Total CPF balances: (a) + (b) $175,000 d. Amount available for top-up Total CPF balances – 1.5 times of Minimum Sum: (c) – (1.5 x $90,000) $40,000 e. OA balance that can be used for top-up $40,000 Example 2 Topping-up limit for the recipient: a. Recipient’s date of birth 1 July 1950 b. Minimum Sum $90,000 c. Net Ordinary (OA) and Special (SA) Accounts balances $25,000 d. Amount of CPF withdrawn for investment $25,000 e. Retirement Account (RA) cash balance $0 f. Minimum Sum Top-up Limit for recipient Minimum Sum – Net OA & SA balances – Amount of CPF w/drawn for investment – RA cash balance : $90,000 – [(c) + (d) + (e)] $40,000
	ANNEX B
	Current Criteria of the CPF Minimum Sum Topping-Up Scheme a. Members who wish to top up their parents’ or spouses’ Retirement Accounts using their CPF must have:   i. Regrossed CPF balances1 of more than twice the prevailing CPF Minimum Sum; and ii. Net balances2 in the members’ Ordinary and Special Accounts must be more than twice the prevailing Minimum Sum cash component.     b. Members who wish to receive top-ups must be above the age of 55. The maximum amount of top-up they can receive under this scheme is the difference between the required CPF Minimum Sum and regrossed CPF balances at age 55.     1 Regrossed balances refer to a member’s total Ordinary and Special Account balances (including CPF monies withdrawn for housing and investments) at age 55. 2 Net balances refer to the member’s available Ordinary and Special Account balances.