Take-up of Lease Buyback Scheme

Mr Liang Eng Hwa asked the Minister for National Development (a) what is the current number of households that have successfully applied for the Lease Buyback Scheme since it was implemented; (b) whether there are plans to improve and expand the scheme; and (c) what are the common reasons why home owners are not considering the scheme.

Mr Speaker, since its introduction in March 2009, about 9,200 households have joined the Lease Buyback Scheme. The scheme aims to improve the retirement adequacy of elderly flat owners by enabling them to sell a portion of the lease of their HDB flat to the Government and join CPF LIFE. In return, they receive a stream of income in their retirement years, while continuing to live in their flat.

When the Lease Buyback Scheme was first introduced, only owners of 3-room or smaller flats were eligible. The Scheme has since been expanded to owners of all flat types, including 5-room and larger flats. In April 2020, the maximum LBS bonus was increased by 50% across all flat types, to $30,000 for 3-room and smaller flats, $15,000 for 4-room flats and $7,500 for 5-room and bigger flats.

There are various reasons why elderly flat owners may not be keen to take up the Lease Buyback Scheme. Some may have other sources of income to meet their retirement needs, while others may prefer to take up other monetisation options such as right-sizing to a smaller flat, possibly receiving a Silver Housing Bonus, or renting out spare rooms or, in fact, their flat.

HDB will continue to review the housing needs of our elderly flat owners to ensure that our housing policies remain relevant and responsive to the changing needs and preferences.

Sir, I am glad that we do have many options now, for the seniors to monetise, to achieve financial security, by renting out, downsizing to smaller place and the Lease Buyback Scheme.

In my view, the ageing-in-place offered by Lease Buyback Scheme is the most suitable for seniors, especially when there is no change in the environment; and unlike renting, they have to live with someone as well. So, I would like to ask the Minister, he mentioned about 9,200 households so far, since the implementation. How can we promote the scheme, so that seniors understand the scheme and the help it can provide, the financial security without having to move out to a new environment?

The second question is, most of the concerns I hear from residents, are that they are worried that they outlive the 30-year tenure of the buyback. And they may have no place to stay thereafter. So, can I ask the Minister if the Government can give a stronger assurance that this would not be the case?

Let me deal with the second question first. When the Lease Buyback Scheme was introduced and subsequently enhanced, this question arose and it continues to operate on the minds of seniors, "Will I outlive the remaining lease of my flat having sold the tail end." That is number one. Our response is, we will not allow that to happen. We will work with the senior concerned, with the relevant top-ups and ensure that they are able to continue to live in flats. This is the first.

And secondly, that is precisely why we have a Home for Life requirement. So, you have to choose the right lease to retain, but that must take you to at least age 95. And that provides some assurance. Though, of course, longevity is a blessing. And we will make sure that for seniors who outlive their lease, that with the necessary top-ups and support, we will be able to provide them with housing.

On the Member's first point, how to ramp up take-up of the Lease Buyback Scheme, that is how I hear him. There are many reasons why the Lease Buyback Scheme take-up is as it is. The numbers have been growing over the years, partly, due to greater awareness of the scheme, greater understanding of its details, but also because of the adjustments that have been made to the scheme over the years.

Some seniors may have their own savings, they may have children who support them. Some seniors would prefer other monetisation options, such as renting out a room, renting out their whole flat, staying with their children in the meantime. Some want to age-in-place, but I am sure, in your house visits, you have heard of seniors who said, "Well, I am an empty nester. My children have all set up their own home and this flat is just too big for me to manage. I want to right-size, so that it is more manageable, more cozy". But they want a smaller flat in their neighbourhood that they are familiar in.

So, ageing-in-place is not just about living in the same flat, though many view it as such. But others view ageing-in-place as ageing in a more manageable, smaller flat, in the same community, in the same estate, familiar with their neighbours, familiar with the shopkeepers and the surroundings.

That is why, in addition to the Lease Buyback Scheme, we also have the Silver Housing Bonus to help those who right-size.

But the Member is right that we want to make sure that our seniors are aware of this option and understand the details. There is some degree of technicality in Lease Buyback Scheme. And, so, we work with media outlets, we organise public talks and seminars in English and in vernacular. We do mini exhibitions and also enquiry booths at local community events to help spread the word about Lease Buyback Scheme.

Seniors who are interested in the Lease Buyback Scheme or at least interested to understand this option, just need to call up HDB's branch office or branch service line to arrange a financial counselling session. At these sessions, HDB will explain personalised information on their options – so, very specific to the senior, such as the different lease lengths they qualify for and the indicative proceeds for these options. And if seniors need time to consider or have further questions, HDB will gladly arrange another appointment to offer further advice.