Singapore Budget 2013 – CPF Changes26th Feb 13
Singapore Budget 2013 - Initiatives Relating to CPF
Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam announced the following initiatives relating to CPF during the FY2013 Budget Statement in Parliament on 25 February 2013:
Enhancements to the Workfare Income Supplement (WIS) Scheme
The WIS scheme has been enhanced as follows:
- Income cap extended to $1,900/month to benefit more Singaporean workers
- Higher WIS payouts of up to $3,500/year to better provide for expenditure needs and enhance retirement savings
- More WIS to be given out in cash to help recipients with their immediate expenses
(40% of WIS payouts for employees and 10% of WIS payouts for self-employed persons)
- Increase in WIS payments to CPF Medisave and Special Accounts, without reducing contributions to the Ordinary Account, to boost the healthcare and retirement savings of older low-wage workers
- Additional criteria to improve targeting of WIS to focus on WIS recipients with limited access to household wealth.
The changes will apply to work done from 1 January 2013 onwards. For more details on this initiative, click here for the FAQ.
Revised CPF Contribution Rates for Low-Wage Workers
Together with the WIS enhancements, the CPF contribution rates for low-wage workers will be raised to help them save more for retirement and medical needs.
- The Employer CPF contribution rates for employees aged above 35 years and earning > $50 will follow the existing rates of employees earning $1,500 or more.
- The Employee CPF contribution rates for employees earning $750 or more will also follow the existing rates of those earning $1,500 or more. The rates for employees earning more than $500 to less than $750 will be phased in. There is no change for employees earning $500 or less as they are not required to make employee CPF contributions.
- The Medisave contribution rates for Self-Employed Persons (SEPs) earning an annual net trade income (NTI) of above $6,000 to $12,000 will be raised to half of the full Medisave contribution rate relevant to their age group. The contribution rate for SEPs earning a NTI of above $12,000 to $18,000 will be gradually phased-in until it reaches the full Medisave contribution rate at NTI of $18,000. There is no change to the contribution rate for SEPs earning $6,000 or less, or more than $18,000.
The changes will apply to work done from 1 January 2014 onwards. For more details on this initiative, click here for the FAQ.