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Singaporean elderly are finding it harder to retire and are selling their HDB flats to the Singapore government to alleviate poverty. The take-up rate for HDB Lease Buyback Scheme doubled to 541 this year, with 43% of them being elderly who live in 4-room flats.

The HDB Lease Buyback Scheme buys a portion of the HDB flats’ remaining lease from the elderly, and the proceeds will be deposited to the CPF Retirement Account, which in turn gives a monthly cash payout. This policy worsen poverty cycle in families leaving nothing in inheritance for Singaporean children, and create a greater rich-poor gap.

Minister of National Development (MND) Lawrence Wong, who is also in-charge of the HDB, inherited the lease buyback law from former PAP Minister Mah Bow Tan, who is infamous for artificially housing prices by cutting housing supply. The latter was fired in 2011. MND Minister Lawrence Wong has no comment over the lease buyback policy.

The policy was introduced to address the inadequacy of the CPF retirement, which pays an interest rate below market rate of other pension funds. CPF pays only 2.5% interest rate while it’s “sister-equivalent” EPF from Malaysia (both were from the same fund prior to independence) pays as much as 5%. The low interest rate also resulted in Singaporeans leaking their CPF balance to inflation. CPF pays low interest to Singaporeans because the Singapore Government is building up the national reserves by profiting from the difference in investment returns made by the country’s two sovereign wealth companies, Temasek Holdings and GIC. Both companies boast earnings as high as 16% since inception, but CPF account holders receive only 2.5%.

Prime Minister Lee Hsien Loong himself controls GIC as its chairman, while his wife controls Temasek Holdings as the CEO. Both of them clear themselves of corruption, claimed that this is Meritocracy and have sued Singaporeans who dare accuse them of corruption.