Experts call for simpler HDB monetisation schemes

SINGAPORE: Experts at the latest Our Singapore Conversation on Housing called for a re-look at policies that allow the elderly to enhance their retirement income through their HDB flat.

This includes not only simplifying the monetisation schemes but also making sure the elderly are truly better off if the schemes are taken up.

Twelve experts attended the discussion on Wednesday night.

They include those from the property industry, academia and not-for-profit organisations for seniors.

Some experts at the dialogue said monetisation schemes should be make more accessible for seniors. They also commented that these schemes are often difficult for seniors to understand and should be communicated in simpler language.

Joseph Cherian, Professor of Finance at NUS Business School, said: "We have to remember what these schemes are, and who these schemes are designed for. They are for the elderly, and probably the middle- and lower-income group. So when you design such schemes, they should be simple to understand."

Director of property firm Chris International, Chris Koh also shared some suggestions on how that could be done.

"For the man in the street, those who hang around the coffeeshop, they would just ask, 'Is there a way I can sell my flat back to HDB, and maybe rent something from HDB? Or can I continue to stay in my own flat?' So what I meant was to maybe have something simpler, just something like sell and rent. To the man in the street, that's my chance to just sell and rent. If we could simplify it to such simple words, that would assist the elderly."

There are currently three schemes that allow seniors to use their HDB flat to build their retirement income.

The first is the Silver Housing Bonus, where eligible elderly receive a cash bonus of up to S$20,000 per household if they downsize to a smaller flat and top up their CPF Retirement Account.

The Ministry of National Development (MND) said as of Thursday, 23 Silver Housing Bonus applications have been received.

Of these, 13 cases have been disbursed and 10 are still being processed.

Explaining the seemingly low take-up rate, MND noted that the scheme has just been implemented.

It added the process of selling and buying a flat to right-size, and qualifying for the scheme takes time.

The second option is to sell part of the flat's lease to the HDB under the Enhanced Lease Buyback Scheme and continue living in the flat for the next 30 years.

MND said 474 households signed up for the Lease Buyback Scheme before its recent enhancements.

As of April 30 this year, HDB received 265 applications for the Enhanced Lease Buyback Scheme, or an average of 88 applications per month. This is higher than the average of 18 applications per month before the enhancements.

Some experts at the dialogue also noted that there are seniors who may be concerned that they outlive the remaining 30 year lease if they take up the buyback scheme.

They also noted that seniors might be concerned that money they receive from the schemes may leave them ineligible for certain medical benefits.

"Monetisation means they have an income so they will lose all their benefits. They will lose their Medifund, they will have to pay for the medicine. They have other services like meals-on-wheels, housekeeping, laundry, transport. They will lose all that if they have this money," said Fiona Hon, a senior care manager at Hua Mei Centre for Successful Ageing.

Subletting is another way seniors can grow their retirement income but a survey done by MND found only 10 per cent of elderly households doing so.

The reasons cited for not subletting include privacy issues and the lack of an extra room.

The third most common reason was they did not need the extra rental income.

For those who do sublet, it is for the extra income for retirement or because of financial difficulties.

Other said they are living with relatives.

To address this, some suggested allowing partitions to be built in flats or even setting a minimum age for subletting to ensure younger Singaporeans do not abuse the scheme.

Experts also brought up other concerns, including the design of studio apartments, which some felt may not be the best environment for the elderly to live in. 

This is the last of four topics being discussed as part of the Our Singapore Conversation on Housing. All discussions are expected to wrap up in July and the feedback will be used as part of the MND's ongoing policy review. - CNA/jc/fa