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Home > National LIFElong Income Scheme > Changes to CPF Minimum Sum Topping-Up Scheme and Voluntary Contributions - Frequently Asked Questions

Frequently Asked Questions: Changes to CPF Minimum Sum Topping-Up Scheme and Voluntary Contributions

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1) What is the maximum amount of top-ups a recipient may receive?

The maximum a recipient can receive, also known as the topping-up limit, is the difference between the prevailing MS and his net balances in his Ordinary, Special/Retirement Account, including CPF withdrawn for investments.

2) Can I make top-ups to those who have no CPF accounts?

Yes, as long as the recipients are Singapore Citizens or Permanent Residents. CPF accounts will be created for them automatically.

3) What are the restrictions on top-ups to the SA?

The top-up monies are meant for the recipient's future retirement needs and cannot be used for housing, investment or insurance.

4) How will the top-ups be used for LIFE premiums?

This will be based on the recipient's choice of LIFE plan. Find out more about CPF LIFE here.

5) Why are the age and relationship conditions for top-ups using CPF not removed?

CPF is meant for the member's own future retirement needs. Hence for top-ups to other member's MS using CPF, the conditions have to be more stringent.

6) With the removal of restrictions on who can top up a CPF member’s account, why is tax relief still restricted only to specified family relationships (i.e. grandparent, parent, spouse, siblings and self)?

The Government has to be prudent about providing tax relief, which amounts to a loss of revenue. Hence, we have targeted our tax relief towards encouraging the more immediate family members to perform top-ups.

7) Is there any limit on the tax deduction that employers can receive?

Employers will enjoy tax deduction on the full amount of top-ups made to their employees' accounts, similar to their deduction of staff remuneration for tax purposes. The amount of top-ups that employers can make to each employee's accounts is however capped by the prevailing Minimum Sum.

8) The changes to the CPF MS Topping-Up Scheme will be implemented only on 1 Nov 2008, but the tax relief changes will be effective from YA2009. How does this affect the tax relief that I can get?

For top-ups that are already permitted today, such as top-ups to parents age 55 and above, the new tax reliefs will apply to all qualifying top-ups made from 1 Jan 2008 onwards. It will apply when you file your tax returns in 2009.

From 1 Nov 2008, CPF Board will allow more ways to top-up, such as cash top-ups to parents below age 55. When you make these top-ups, tax relief will apply to the qualifying top-ups when you file your tax returns in 2009.

What you can already do today
Any of the following cash top-ups or contributions made from 1 Jan 08 will be eligible for the new tax reliefs in YA09.

What you can also do from 1 Nov 2008
Any of the following cash top-ups that you make from 1 Nov 08 will be eligible for the new tax reliefs in YA09.

1.       Make cash top-ups to your own RA and the RA of your parents/ grandparents where the recipients are 55 and above.

2.       Make cash top-ups to the RA or SA of your siblings and spouses including those below the age of 55.

3.       Make voluntary contributions to your Medisave Account.

1.       Make cash top-ups to your own SA or the SA of your parents & grandparents, for recipients below age 55.

2.       Make cash top-ups up to the prevailing MS for recipients below age 55 (the $26,393 annual cap on voluntary and mandatory contributions will no longer apply to the MS Topping-Up Scheme).

3.       Get your employer or any other source to make cash top-ups to your RA or SA.
ð       Employer contributions will be tax-deductible, and employees can also claim tax relief on such contributions.

9) For voluntary contributions to all 3 CPF accounts rather than specifically to the Medisave Account, is the portion that goes into the Medisave Account eligible for tax relief?

No, tax relief is available only for top-ups made to a member's Retirement or Special Account to help him meet the Minimum Sum (via the Minimum Sum Topping-Up Scheme), or to the Medisave Account, to encourage members to save more for their retirement or healthcare needs respectively. Voluntary contributions that are spread across the three CPF accounts will not be eligible for this tax relief.

Last updated on 06 Mar 2008 11:56:41