Oral Answer by Mrs Josephine Teo Minister for Manpower to Parliamentary Question on Early Withdrawal of CPF Payouts
NOTICE PAPER NO. 1457 OF 2018 FOR THE SITTING ON OR AFTER 15 JANUARY 2019
QUESTION NO. 2454 FOR ORAL ANSWER
MP: ER DR LEE BEE WAH
To ask the Minister for Manpower (a) in the past three years, what is the percentage of successful appeals for earlier withdrawal of payouts by CPF members who had to retire early; (b) what are the main reasons for disallowing the appeals; and (c) whether the Ministry will consider another option for CPF Life payments that start payouts at the minimum retirement age.
- On reaching the age of 55, all CPF members are eligible to make CPF withdrawals of up to $5,000, subject to available balances in the Ordinary and Special Accounts. Those with savings above the applicable Full Retirement Sum can withdraw all the monies above that amount. Those who own a property may also withdraw their savings above the Basic Retirement Sum using property charge or pledge.
- Under the Medical Grounds Scheme (MGS), CPF members may apply to withdraw or start their payouts before the CPF Payout Eligibility Age of 65. The eligibility criteria include being permanently incapacitated, terminally ill, or having a severely impaired life expectancy due to illness. Such applications have to be accompanied by the relevant doctors’ certification. In the past three years, about 65% of applications under the MGS were successful; the remaining 35% were not successful because applicants did not meet the eligibility conditions. Unsuccessful applicants were referred to other avenues of help, such as Workforce Singapore (WSG) and the Social Service Offices.
- In the last decade, the employment rate for residents aged between 60 to 64 has risen from 47.2% in 2008 to 60.4% in 2018. The unemployment rate for the same age group has remained consistently below 3% in the past 5 years.
- A contributing factor is the introduction of re-employment legislation in 2012, which made it an obligation for employers to offer eligible employees continued employment after the age of 62, up to the age of 65. Re-employment has made it possible for many Singaporeans to work beyond the age of 62. Of those eligible for re-employment and who wished to continue working, over 98% were offered re-employment. In 2017, the re-employment age was raised further from 65 to 67.
- In 2018, a Tripartite Workgroup on Older Workers was formed to review, among other things, the longer-term relevance of and the next moves on the retirement and re-employment ages. However, as the CPF Payout Eligibility Age was raised to 65 only in 2018, MOM does not have plans to lower it. The MGS will also continue to be available to eligible members who may need to withdraw or start their payouts earlier than age 65.