After secretly increasing Minimum Sum to S$181,000 in Jan 2018, the Singapore government have came out with a new scheme to leech CPF funds again: this time with compulsory Eldershield on top of Medishield Life insurance.
Senior Minister of State Chee Hong Tat today (Jan 30) announced on his Facebook page proposing that the disability insurance, Eldershield, be made mandatory:
“An enhanced ElderShield scheme would enable Singaporeans to pool our risks and resources in preparation for old age.”
Currently, Eldershield is an opt-in by default insurance scheme paid through CPF Medisave for Singaporeans aged 40 and above, and it pays S$400 a month for 6 years only when a person is certified permanently disabled and below the age of 65. Once a recipient reach 65 years old, there will be no payout. The PAP Minister said he want to lower the age to 30 years old and make the insurance compulsory. However, Minister Chee Hong Tat did not explain why there is a need to lower the age even though the probability of being permanently disabled is lower at the age band between 30 to 40 years old. The PAP Minister also did not explain why should Eldershield be made compulsory and did not provide any data to back up his proposal.
The Singapore government is expected to collect an estimated S$1.5 billion if Minister Chee Hong Tat made the insurance compulsory. Aside from paying Eldershield, Singaporeans need to pay Medishield Life premiums.
Those who have not enough Medisave to pay the premiums will have to pay in cash, or face legal actions from the Ministry of Health that administers the insurance.
With more Singaporeans paying premiums for health insurance through their CPF accounts, the Singapore government can save on healthcare spending.