Budget 2012 Key Budget Initiatives 2
MEASURES for households
(A) Rewarding Work for the Elderly
(A1) Higher CPF Contribution Rates for Older Workers
To help older workers better prepare for their retirement, the CPF contribution rates for workers aged above 50 years will be increased from 1 Sep 2012. The CPF contribution rates for those aged above 50 years to 55 years will eventually be raised to reach the full CPF contribution rate of 36%.
CPF Contribution Rates Changes*
Age / New contribution rates** from 1 Sep 2012(increases from current rates are in brackets)
Employer / Employee / Total
Above50 to55 years / 14
(+2) / 18.5
(+0.5) / 32.5
(+2.5)
Above55to60 years / 10.5
(+1.5) / 13
(+0.5) / 23.5
(+2)
Above60to65 years / 7
(+0.5) / 7.5 / 14.5
(+0.5)
* For those with monthly wages exceeding $1,500 a month. Workers in the affected age groups and earning between $50 and $1,500will see pro-rated increases in their employer and employee CPF contribution rates.
** % of wages.
With the increase in CPF contribution rates, the allocation rates to the Ordinary Account (OA), Special Account (SA) and Medisave Account (MA) will also be adjusted.
CPF Allocation Rates Changes
Age / New allocation rates*from 1 Sep 2012(increases from current rates are in brackets)
OA / SA / MA
Above50to55 years / 13.5
(+0.5) / 9.5
(+1.5) / 9.5
(+0.5)
Above55to60 years / 12
(+0.5) / 2
(+1) / 9.5
(+0.5)
Above60to65 years / 3.5 / 1.5
(+0.5) / 9.5
* % of wages.
(A2) Higher CPF Contribution Rates for Older Self-Employed Persons
The Medisave contribution rates for self-employed persons aged 50 years and above, and with annual net trade income of $18,000 and above, will be increased by 0.5% from 1 Jan 2013. This change will align the MA contribution rates for older SEPs with that for older employees.
Medisave Contribution Rates for Self-Employed Persons with Annual Net Trade Income of $18,000 and above
Period / Age as at 1 Jan50 years or more
Current / 9.0%
From 1 Jan 2013 / 9.5%
Further details on contribution rates can be found on the Ministry of Manpower website at
(A3) Higher Earned Income Tax Relief for Older Workers
The earned income tax relief will be doubledfor workers aged 55 years and above. This will be effective from YA2013 onwards. This will cost $30 million per year.
Age / Current Relief / New Relief55-59 / $3,000 / $6,000
60 and above / $4,000 / $8,000
(B) Helping Seniors Unlock Savings
(B1) Silver Housing Bonus
Elderly Singaporeans aged 55 years and above whosell their existing flats and moveto 3-room and smaller flats or Studio Apartments will receive a bonus of up to $20,000 per household ($15,000cash; $5,000 CPF). Key features of the new scheme are:
- Commit thesale proceeds to their CPF Retirement Account, up to the prevailing CPF Minimum Sum.
- The bonus will match the proceeds committed to their CPF dollar for dollar, up to $20,000.
- The top-up, along with all other monies in the Retirement Account, will be used to purchase a CPFLIFE annuity, which will provide a lifelong monthly payout.
- The remaining proceeds beyond the prevailing Minimum Sum can be taken out in cash.
(B2) Enhanced Lease Buy-back Scheme (LBS)
The LBS will be enhanced so that:
- Beneficiariesmaycash out the proceeds after setting aside the prevailing Minimum Sum in their Retirement Accounts.
- The LBS bonus will be increased from $10,000 to up to $20,000 per household ($15,000 cash; $5,000 CPF).
More details on (B1) and (B2)will be provided during the Ministry of National Development Committee of Supply.
(C) Stronger Healthcare Support
(C1) More Hospital Beds
By 2020, the number of beds will be increased:
- AcuteHospitals: Increased by 1,900 beds (30%)
- Community Hospitals: Increased by 1,800 beds (>100%)
(C2) Expansion of Longterm and Community-based Care
Longterm care services ranging from nursing home care to home- and community-based care will be improved significantly by 2020.
More details on (C1) and (C2) will be provided by the Ministry of Health and Ministry of Community Development, Youth and Sports during their Committee of Supply.
(D) Enhancing Affordabilityof Healthcare
(D1) Higher Subsidies in the Intermediate and LongTerm Care (ILTC) Sector
The Government will increase the subsidies for the lower- and middle-income groups for services in the intermediate and long term care sector:
- All patients in community hospitals will now qualify for government subsidies, up from halfof all patients currently. The middle–income group will receive the largest increase in subsidy rates, getting a subsidy of 20 to 50% when they previously did not receive any.
- Subsidies for nursing homes, community and home-based care will also be raised. Two-thirds of Singaporean householdswill qualify for subsidies, up from 50% currently.
(D2)Grant for Hiring a Foreign Domestic Helper
A $120 grant per month will be provided in place of subsidies for non-medical home-based care to help lower- and middle-income families who may prefer to hire a foreign domestic helper to care for an elderly member at home (if the senior cannot perform three or more Activities of Daily Living, or has severe dementia).
(D3) GST Absorption for ILTC Sector
To further improve affordability of long term care, GST for all subsidised patients using ILTC services will be permanently absorbed. This will include Community Hospitals, nursing homes and home care.
More details on (D1) and (D3) will be provided during the Ministry of Health Committee of Supply.Details on (D2) will be provided during the Ministry of Community Development, Youth and Sports Committee of Supply.
(D4) Enhancement for Active Seniors (EASE) Programme
A new subsidy will be given for installing elderly-friendly features in homes, such as anti-slip treatment to bathroom tiles and grab bars. The modifications cost around $2,000, and the subsidy will cover up to 95% of this cost. About 130,000 households with at least one senior or disabled person will benefit. This will cost the Government $260 million over 10 years.
More details will be provided during the Ministry of National Development Committee of Supply.
(D5) Medifund Top-up
The Government will top-up $600 million to the Medifund. This enables $20 million (over 20%)more help to be disbursed each year.
(D6) One-off Medisave Top-up
To offset the increase in MediShield premiumsin 2012, all Singapore Citizens insured under MediShield will receive a one-off Medisave top-up.
Age Group / Medisave Top-up1-40 / $50
41-50 / $100
51-60 / $200
61-75 / $300
76 and above / $400
This will benefit more than 3 million Singaporeans.
More details on the MediShield premium changes will be provided during the Ministry of Health Committee of Supply.
(E) Supporting Singaporeans with Disabilities
(E1) New Development Support Programme (DSP)
Pre-school children with mild speech, language and learning delays will be able to receive learning support intervention and if necessary therapy intervention to help them while they are in mainstream pre-schools.
(E2) Extension of Special Employment Credit (SEC)
The SEC will be extended to employersthat hire Persons With Disabilities (PWDs)of all ages who have graduated from VWO-run Special Education (SPED) schools regardless of age. The SEC for PWDs will be set at a higher quantum, at 16% of the employee’s monthly income, up to $240 per month.
The employers of about 2,600 PWDs will benefit this year.
(E3) Extension of Workfare Income Supplement (WIS)
The WIS will be extendedto all PWDs who have graduated from VWO-run SPED schools regardless of age. About 1,400 work-capable PWDs will benefit this year.
More details on measures (E1), (E2) and (E3) will be provided during the Ministry of Community Development, Youth and Sports Committee of Supply.
(E4) Doubling of Handicapped Earned Income Tax Relief
The Handicapped Earned Income Tax Relief for disabled workers of all ages will be doubledeffective YA2013:
Age / Current Relief / New ReliefBelow 55 / $2,000 / $4,000
55-59 / $5,000 / $10,000
60 and above / $6,000 / $12,000
About 1,000 work-capable PWDs will benefiteach year.
(E5) Better Adult Care
The subsidies for Singaporeans with disabilitieswill be aligned with those for the elderly (see section (D): “Enhancing Affordability of Healthcare”).
To cater to Singaporeans with disabilities who require care throughout their adult life, thecapacity of Day Activity Centresfor the disabled and disability homes will be increased by 250 places (or 25% increase)and180 beds (or 21% increase) respectively.
More details will be providedduring the Ministry of Community Development, Youth and Sports Committee of Supply.
(F) Uplifting Low Income Families
(F1) Extend Pre-School Subsidies
A new per capita household income criterion will be introduced to the Kindergarten Fee Assistance Scheme (KiFAS) and the Centre-based Fee Assistance for Childcare (CFAC).
(F2) Financial Assistance Schemes (FAS) for Schools
The household income ceiling of the MOE FASwill be raised. All families who meet either the gross household income ceiling of $2,500 or the per capita income cap of $625 will qualify for subsidies. The enhancement will benefit an additional40,000 students.
(F3) Top-Ups to School Advisory Committees/ School Management Committees Fund
The School Advisory Committees’ and Schools Management Committees’ funds will receive top-ups of between $10,000 and $15,000 per yearfor the next three years.
(F4) Enhance Student Care Fee Assistance (SCFA) Scheme
The SCFA scheme will be enhanced and extended to help more lower-income families with monthly household income of up $3,500. Larger families will also benefit from the new per capita household income criterion. The enhancements to SCFA will benefit 3,700 children.
(F5) Top-up to Edusave Endowment Fund
The Edusave Endowment Fund will receivea $200 million top-up.
(F6) Top-up to ComCare Endowment Fund
The ComCare Endowment Fund will receive a $200 million top-up.
(F7) Top-ups to CommunityOrganisations
A total of $10 million will be given to our Self-Help Groups and the CCC ComCare Fund.
More details on (F1) and (F4) will be provided during the Ministry of Community Development, Youth and Sports Committee of Supply.Details on (F2) and (F3) will be provided during the Ministry of Education Committee of Supply.
(G) A Fair Tax System
(G1) GST Voucher
The Government has introduced a permanent system of offsets in the form of a GST Voucher to help our lower-income Singaporeans, and has set aside $3.6 billion in the GST Voucher Fund to finance the scheme for the first five years. The GST Voucher will fully offset what our elderly households staying in 1- to 3-room HDB flats pay in GST, and offset about half of the total GST bills for our lower-income families (who do not have elderly members).
The GST Voucher has 3 components and will cost $680million in FY2012:
- GST Voucher – Cash: The amount that an eligible Singaporean will receive is based on his income and the value of his home, as shown below:
Assessable Income for YA2011 / Annual Value of Home as at 31 Dec 2011
Up to $13,000 / $13,001 to $20,000
$24,000 / $250 / $100
- The annual value criterion of $20,000 will cover all HDB properties as well as lower-end private properties.
- GST Voucher – Medisave: This comprises an annual top-up to the Medisave Accounts of older Singaporeans aged 65 and above and living in properties which have an Annual Value that does not exceed $20,000.About 85% of all elderly Singaporeans will benefit.
Age / Annual Value of Home as at 31 Dec 2011
Up to $13,000 / $13,001to $20,000
65-74 / $250 / $150
75-84 / $350 / $250
≥ 85 / $450 / $350
- GST Voucher – U-Save: These will be given to all HDB households to help directly offset their monthly utilities bills.
HDB Flat Type / Annual GST Voucher – U-Save
1- & 2- Room / $260
3-Room / $240
4-Room / $220
5-Room / $200
Executive / $180
Singaporeans can expect to receive their annual GST Voucher – Cash and GST Voucher – Medisave from Aug 2012 onwards. The GST Voucher – U-Save will be given out in Jan and Jul each year, starting Jul 2012.
Singaporeans who qualify for the GST Voucher will receive a letter in Jul 2012.
Click here for a list ofquestions and answers on the GST Voucher.
For further clarification on the GST Voucher – Cash and Medisave, you can email call 1800 2222 888 (Mon-Fri: 8am–6pm).
For further clarification on the GST Voucher – U-Save, you can email call 1800 2222 333 (Mon-Fri: 8am–6pm).
(H) Enhancing our Transport System
(H1) Improving Bus Service Levels
The Government will partner public transport operators (PTOs) to add 800 buses over the next five years, or a 20% increase. The Government will provide funding for 550 buses, while the public bus operators will add another 250 buses.
The Government will be funding running costs over 10years.$1.1 billion will be set aside for a Bus Services Enhancement Fund for these commitments.
(H2) Carbon Emissions-based Vehicle Scheme (CEVS)
The current Green Vehicle Rebate (GVR) scheme will be replaced with a new CEVS in Jan 2013. This will cost the Government $34 million per year.
CEVS is based on carbonefficiency and will be applicable to all new passenger cars. Cars with low carbon emissions will enjoy rebates on their ARF of up to $20,000, while those with high carbon emissions will have to pay a registration surcharge of up to $20,000.
For commercial vehicles and motorcycles, the Government the GVR scheme will be extended till end-2014.
More details will be provided during the Ministry of Transport Committee of Supply.
(H3) Lowering of Special Diesel Tax for Euro V Vehicles
The Special Tax for Euro V-compliant diesel cars will be lowered from $1.25 per cc to $0.40 per cc from 1 Jan 2013.
(H4) Removal of Additional Transfer Fee (ATF)
The ATF, levied on used-vehicle transactions, will be removed with effect from 18 Feb 2012. This amounts to $70 million per year in revenue foregone.
More details on measures (H3) and (H4) can be found onthe Land Transport Authority (LTA)website at
(I) Miscellaneous Tax Initiatives
(I1) Excise Taxes on Non-Cigarette Tobacco Products
The excise duties on (a) beedies, “ang hoon” and smokeless tobacco; and (b) unmanufactured tobacco will be raised by 20% and 10% respectively with effect from 17 Feb 2012.
(I2) GST Relief
Goods brought in by qualifying travellers and residents from abroad will be given higher relief from 1Apr 2012:
Time spent abroad / GST import reliefAway for 48 hours or more / $600
Away for less than 48 hours / $150
Budget 2012 Key Budget Initiatives 2