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Refund of CPF savings required, and will help in purchase of new flat

  • The Straits Times (28 February 2014): Refund of CPF savings required, and will help in purchase of new flat
  • The Straits Times (17 February 2014): Help kids ease parents’ mortgage burden

Refund of CPF savings required, and will help in purchase of new flat
- The Straits Times, 28 February 2014

  1. We refer to Ms Jayapriya Kanagasundra’s letter (“Help kids ease parents’ mortgage burden”, 17 February).
  2. Under the CPF Act, any withdrawals of CPF savings for housing must be secured against a charge on the property, and such a charge can only be created when the property is owned by the CPF member. This is to protect the savings of the CPF member in the event that there is a need to liquidate the property and distribute the proceeds of the sale amongst creditors. There is no need for a CPF member to refund the CPF used for the first property if he were to decide to purchase a second property so long as the CPF member continues to own the first property.
  3. In the case of HDB properties, as these are subsidised public housing, HDB does not allow an individual to own more than one HDB property at the same time. Because the CPF member who decides to purchase a second HDB flat must relinquish ownership of the first flat, the CPF charge on the first HDB flat will lapse. Under the law, the CPF savings withdrawn for the flat she no longer owns must be returned to the CPF account, which in turn can be used to defray the cost of the new flat purchased.
  4. We empathise with the situation highlighted by Ms Kanagasundra where a child is withdrawing as a co-owner of her parents’ flat and the household faces difficulties in repaying the sums involved. CPF members who have difficulties repaying in a lump sum may opt to make progressive payments to bring down the total refund amount until the new flat is ready for possession. Members who lack cash to finance the repayment can obtain a loan from HDB or the banks secured against the property, or make a transfer of CPF funds from the eligible accounts of other co-owners.
  5. We thank Ms Kanagasundra for her feedback and are reviewing how best we can help families like hers.

Help kids ease parents’ mortgage burden
- The Straits Times, 17 February 2014

My parents are currently paying a home mortgage that is more than 70 per cent of their combined income.

In addition, they have to support my sibling, who is still studying.

There is not enough in their Central Provident Fund account to ease their burden, and selling the flat will result in a major loss.

I wish to help my parents service their loan by becoming an owner of the flat and using my CPF to pay some of the mortgage.

However, if I do so, when I eventually marry and buy a house with my future spouse, my parents will have to repay me the amount that had been deducted from my account in cash and with interest.

I am unclear as to the rationale for this.

If my aged parents are unable to pay me back now, how can they be expected to do so in a few years, since they will still need to continue paying the mortgage?

Can a waiver of repayment be given for children like myself?

Being part of a traditional Asian society that emphasises filial piety, I feel it is my duty to lessen my parents’ burden, not make them indebted to me.