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Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam announced the following initiatives relating to CPF during the FY2012 Budget Statement in Parliament on 17 February 2012:
For more details of Singapore Budget 2012, visit http://www.mof.gov.sg/budget_2012/key_initiatives/index.html.
For the press release issued by Ministry of Manpower, please click here.
Lower CPF contribution rates for older workers were introduced to help improve the employability of older workers when seniority-based wage structures were prevalent. Since then, older workers have become more employable and progress has been made in reducing seniority-based wage rigidities. This positive trend is expected to continue. After consultation with its tripartite partners, the Government has reached a consensus to maintain in the long term the same CPF contribution rates for all workers up till age 55, rather than age 50.
The changes to CPF contribution rates for older workers will be introduced gradually to moderate the cost impact on employers and to take into account the subdued global economic outlook in the near term. The following increases as shown in the table below will be introduced as a first step with effect from 1 September 2012.
Increase in CPF contribution rates
| Age group |
Percentage point increase in CPF contribution rates |
Allocation of increase |
| Employer’s share |
Employee’s share |
Total contribution rate |
Ordinary Account |
Special Account |
Medisave Account |
| Above 50-55 |
2% |
0.5% |
2.5% |
0.5% |
1.5% |
0.5% |
| Above 55-60 |
1.5% |
0.5% |
2% |
0.5% |
1% |
0.5% |
| Above 60-65 |
0.5% |
- |
0.5% |
- |
0.5% |
- |
For more details on this initiative, click here for the FAQ.
For the new CPF contribution rates, please click here.
The Special Employment Credit (SEC) was introduced as a 2011 Budget Initiative to support employers as well as to raise the employability of older low-wage Singaporeans. It will be enhanced in 2012 to provide employers with continuing support to hire older Singaporean workers.
With the 2012 enhancements, about 73,000 employers employing 350,000 older Singaporeans are expected to benefit from the SEC. This will cost the Government about $470m per year over the next five years. Employers may qualify for the SEC for workers employed from 1 January 2012 onwards. Payments will be made twice a year, with the first payment of the enhanced SEC to be made in September 2012. For more details on the SEC, click here.
To offset the expected increase in MediShield premiums, all Singapore Citizens insured under MediShield will receive a one-off Medisave top-up. Older Singaporeans will receive a larger top-up as they face higher premiums.
|
Age as at next Birthday |
Medisave Top-up |
|
1-40 |
$50 |
|
41-50 |
$100 |
|
51-60 |
$200 |
|
61-75 |
$300 |
|
76 and above |
$400 |
For more details on this initiative, click here for the FAQ.
MOF has announced the introduction of the Silver Housing Bonus and enhanced Lease Buyback Scheme. More details on the schemes will be announced by the Minister for National Development at the Ministry of National Development’s Committee of Supply speech. |