Coverage of Home Protection Scheme

Mdm Speaker, HDB flat owners who are using CPF savings to service their monthly loan instalments are required to take up the Home Protection Scheme (HPS) or an equivalent mortgage reducing insurance (MRI). This applies to about 60% of all HDB flat owners with outstanding loans. Of this group, that is, of this 60%, 95% are covered under the HPS or an equivalent MRI, while 3% are uninsurable or ineligible for HPS cover. The remaining 2% had lapsed on their HPS premium payments.

Of the 40% of HDB flat owners who are not required to take up HPS because they are not using CPF savings to service their monthly loan instalments, 44% of this 40% have taken up the HPS voluntarily. Some have also chosen to take up MRI from private insurance companies.

The HPS premium is deducted automatically from the Ordinary Account (OA) of CPF members. For those with insufficient OA savings, a grace period of two months is provided for them to make their premium payment. During the grace period, any new OA contributions are channelled first towards meeting the HPS premium payments, and then monthly loan instalments. This is, essentially, to minimise lapses in coverage. CPF members are also notified to

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make cash top-ups to their OA, as required, to make up the shortfall for the HPS premiums. If their children wish to assist with making premium payments, they can actually do so via this route. CPF members can also choose to tap on the OA savings of their spouse, who must also be a co-owner of the flat, to pay for the premium.

We will study the feasibility of using non-spouse co-owners' OA savings for the payment of HPS premiums, without affecting the payers' own retirement adequacy. This is a feedback that has cropped up regularly. We are in the process of working with MND to study other options to help HPS policy holders who face difficulties in paying their HPS premiums to minimise lapses in HPS coverage.

I would like to find out the rationale for not allowing HPS premiums to be deducted directly from children's CPF OA since funds from the children's CPF MAs are currently allowed to be used to pay for parents' premiums for MediShield as well as Medisave-approved integrated Shield plans. Are there different parameters that are used to consider them?

Mdm Speaker, I would like to thank the Member for the supplementary question. We would like to support home ownership and, therefore, CPF members can actually use their OA savings to finance their own home purchase. The OA contributions, however, are not sized to support additional housing needs that the CPF family members may have.

For the OA account, at present, we are not sizing it such that it is meant to cater for this need. Essentially, we do encourage CPF members to set aside sufficient CPF savings for retirement and should not compromise this by overspending on their housing or in support of their parents' housing.

The long and short of it is how we size that particular account. At present, we do not believe that that is the approach that we would like to take.

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