Singapore Budget 2015: Medisave Minimum Sum to be scrapped next year
SINGAPORE - The Medisave Minimum Sum requirement will be scrapped from next year so people will no longer need to top up their accounts to this amount - which now stands at $43,500 - before they can withdraw their CPF monies at the age of 55.
But the upper limit remains and this has been renamed the Basic Healthcare Sum.
This limit will go up from $48,500 now to $49,800 in January next year. Any amount in excess of this will be transferred to Retirement and Special Accounts, which will eventually contribute to people's CPF Life payouts in old age.
The change will make it easier for Singaporeans to understand and plan for their retirement, said Health Minister Gan Kim Yong in Parliament on Thursday at the Committee of Supply debate.
-- GRAPHIC: MINISTRY OF HEALTH
It is one of several changes to Medisave to make healthcare more affordable, to maximise use of this compulsory healthcare savings, and to make it easier for people to plan for their healthcare needs as they age.
The Basic Healthcare Sum will also be fixed for each cohort when they turn 65 - even though it will continue to increase over the years for younger people.
Mr Gan explained: "Members can have more certainty on the amount of Medisave they should keep for their retirement healthcare needs."
Going forward, the amount of Medisave that can be used to pay for health insurance will also change from the current flat rate of $800 for everyone aged 65 years and younger, to one that is tiered by age cohort.
There will be no limit on the use of Medisave to pay the premiums of the basic MediShield Life when it is launched later this year.
What will change is the component used to pay for private integrated Shield plans.
Said Mr Gan: "We will have to balance between helping Singaporeans pay for their IP premiums using Medisave, and ensuring that Medisave is adequately preserved for healthcare needs, especially for the lower income."
Details of this scheme will be released later this year.
From June 1, Medisave use will be extended to treat epilepsy, osteoporosis, psoriasis and rheumatoid arthritis. This brings to 19 the number of chronic conditions that can be paid for with Medisave.
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