SINGAPORE: Parliament is making changes to the laws governing the Central Provident Fund (CPF) scheme to keep the system efficient and relevant to the needs of Singaporeans.
Moving the second reading of changes to the CPF Act, Acting Manpower Minister Tan Chuan Jin said that from 1 January 2013, Singaporeans will be able to make cash or CPF top—ups to the accounts of parents—in—law and grandparents—in—law as well.
The changes were made in response to the operational experience of the CPF Board.
The Minimum Sum top—up scheme was introduced to help Singaporeans contribute to the retirement savings of their loved ones by topping up their CPF Special Account (SA) or Retirement Account (RA).
The scheme now covers parents, grandparents, spouse and siblings.
Later this year, the CPF rules will be amended to specify that parents—in—law and grandparents—in—law will be amongst those eligible to receive CPF top—ups.
The Income Tax Act will also be amended later this year to extend tax relief to members who make cash top—ups to the Special Account or Retirement Account of their parents—in—law and grandparents—in—law.
Members who make cash top—ups to eligible family members will qualify for tax relief of up to S$7,000.
Members who make cash top—ups to their own Special Account or Retirement Account as well will qualify for an additional tax relief of S$7,000.
Mr Tan said that with these changes, Singaporeans will be able to make cash or CPF top—ups to their own Special Account or Retirement Account as well as to those of their spouses, siblings, parents, grandparents, and from 1 January 2013, parents—in—law and grandparents—in—law as well.
Other changes include simplifying the channels for making top—ups to a member’s own SA and RA, introducing a minimum age for making CPF nominations — 16 years of age — and a refinement of the housing refund policy for CPF funds.
Mr Tan said the the new housing refund policy aims to ensure that the distribution of proceeds from the sale of property reflects the CPF usage among the co—owners and at the same time older members will not be required to retain in their CPF more refunds than are necessary.
The changes take effect on 1 January 2013.
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