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Written Answer by Mr Tan Chuan-Jin, Acting Minister for Manpower & Senior Minister of State, National Development, to Parliamentary Question on Dependency Ratio Ceilings for Repayment of CPF Funds when Co-owners Withdraw from Co-ownership

Dr Intan Azura Mokhtar: To ask the Acting Minister for Manpower whether the Ministry will consider reviewing the current CPF policy of requiring parents to repay the CPF funds that have been used to service the HDB housing loan of their children who are co-owners of their existing flat when the children withdraw from co-ownership to purchase another HDB flat with their spouse or fiancé/fiancée.

Mr Tan Chuan-Jin:

  1. The primary purpose of the CPF is to provide for Singaporeans’ retirement. To support home ownership for Singaporeans, members can use CPF savings to finance their home purchase. To ensure that the monies return to the member’s CPF account, there is a CPF charge on the property. This will ensure that when a member sells his property, the proceeds from the sale are used to refund the principal amount of CPF monies withdrawn to finance the purchase, as well as any interest that would have accrued had this amount not been withdrawn.
  2. The requirement to refund CPF savings used for home purchases also applies to any other scenario where the child wishes to lift the charge on the property that he had purchased with his parents earlier. The refund can be made by transferring the parents’ CPF monies that are available for use for housing to the child’s CPF account, by cash, or by taking up a loan with HDB or the banks if eligible. If the child is not able to refund the CPF monies, we are unable to lift the charge on the property that he had purchased with his parents. This will ensure that when that property is eventually sold, the proceeds will be refunded to CPF thus ensuring that his retirement adequacy is not compromised.