Updated: 02/22/2014 06:23

Older Singaporeans to benefit

Older Singaporeans to benefit

Older Singaporeans, besides the pioneer generation, will also benefit from this year's budget. 

In his Budget Statement today, Finance Minister Tharman Shanmugaratnam announced that older workers will see their CPF contribution rates raised from January next year. 

In particular, there'll be a 1.5 percentage point increase for workers aged above 50 to 55. 

That's one percentage point from the employer and half a percentage point (0.5 percentage point) from the worker, bringing the CPF contribution rate to 34 per cent. 

There'll also be a 0.5 percentage point increase in employer contribution rate for workers aged above 55 to 65. 

"All increases in employer contributions will be allocated to the Special Account. As some older households may still be servicing mortgages, the 0.5 percentage point from employees will go to the Ordinary Account."

Mr Tharman says as a result of these changes, a 50-year-old worker earning a wage of three thousand dollars will have $6,500 more in his retirement savings at age 65. 

To help employers offset the increase in contribution rates, the government will provide a one-year increase in special employment credit of up to half a percentage point. (0.5 percentage point). 

Besides support in this area, Mr Tharman adds that Singaporeans aged 55 and above this year will receive Medisave top-ups for the next five years. 

The top-ups, which are means-tested, will range between a hundred and two hundred dollars 

This measure targets those who have missed the cut-off age of 65 to qualify for the pioneer generation package. 

It will amount to some $440 million.

On top of this, Mr Tharman says that income tax reliefs will be enhanced by up to $3,000.

These are specific to parent relief and handicapped parent relief. 

This will benefit about 170,000, and cost about $27 million.

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