Debated in Parliament on 11 Nov 2013.
Dr Janil Puthucheary asked the Acting Minister for Manpower (a) what is the current percentage of HDB homeowners who have to pay their Home Protection Scheme (HPS) premiums in cash; (b) what percentage of homeowners above 55 years old are not able to pay their HPS premiums; (c) whether the Ministry will consider allowing the use of CPF members' children's accounts for the payment of these premiums should the member's account have insufficient funds; and (d) whether the current provision of only allowing
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the use of a spouse's account be liberalised, especially for divorced individuals for whom the spousal option is no longer valid.
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. There are also HDB flat owners who are not using CPF savings to service their monthly loan instalments but chose to take up HPS. About 3% of HPS policy holders on the annual premium plan paid for their premiums partially or fully in cash this year. About 4% of HPS policy holders 55 years old and above on the annual premium plan had their coverage lapse due to non-payment of the premium.
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 HPS premium payments and then monthly loan instalments, to minimise lapses in coverage. CPF members are also notified to make cash top-ups to their OA, as required, to make up the shortfall for the HPS premium. If their children wish to assist with making premium payments, they can do 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. We are also 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.
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