Proposal to Review CPF Withdrawal Limit for Singaporeans who Have Not Met Full Retirement Sums in View of Inflation

Mr Leong Mun Wai asked the Minister for Manpower whether the withdrawal limit of $5,000 from the CPF Special and Ordinary Account savings for Singaporeans who have not met their Full Retirement Sum can be increased to match the rate of inflation.

Mr Speaker, the intent of the Central Provident Fund (CPF) is to meet members' long-term retirement needs. Increasing the $5,000 unconditional withdrawal limit will only lower members' future monthly retirement payouts, especially for those who have not met their required retirement sum. To help Singaporeans cope with inflation and the rising cost of living, the Government has instead rolled out a comprehensive series of measures to provide immediate and targeted support which have helped the lower-income and the more vulnerable groups.

Nonetheless, the CPF system has some built-in some flexibility. For those who turned 55 from 2013 onwards, they can withdraw up to 20% of their Retirement Account savings from age 65. Property owners also have the flexibility to set aside the Full Retirement Sum (FRS) with a mixture of property and cash and can thus withdraw their Retirement Account savings above the Basic Retirement Sum or BRS.

Mr Speaker, can I pose one supplementary question to the Minister? Given that we are going to implement the Majulah Package, this will lead to the beefing up of the CPF Retirement Account for the lower-income Singaporeans.

Given that, will the Ministry of Manpower (MOM) reconsider its policy stance with regard to increasing the $5,000 withdrawal for the lower-income CPF account holders? Given that besides retirement, many Singaporeans would also like to realise some of their lifetime ambition, some of the things they like to do, at the age of 55. So, in line with the inflation that we have experienced over the last few decades, the $5,000 withdrawal amount appears to be too small. So, will MOM reconsider that amount?

I thank Mr Leong for that question. All of us in MOM, alongside with the CPF Board, constantly and consistently review the whole suite of measures that we have at hand to help Singaporeans. It is our commitment to all Singaporeans that we will walk every step of the way with you.

I think, coming from an investment background, Mr Leong would understand that there are some savings that are for the long term and there are also short-term measures to help out. We have always believed that the CPF system offers, over the long haul, adequacy for peace of mind at retirement.

We can support our Singaporeans to managing some of the increased cost of living through the many measures that we have introduced over the last many years. Mr Speaker, Sir, if you can bear with me, I can enumerate some of the schemes for illustration.

For the immediate cost of living issues, the Government has announced one-off support measures under the Assurance Package at Budget this year. So, you have got the Cost-of-Living Special Payment of between $200 and $400 for each eligible adult Singaporean. Then, there is the Cost-of-Living Seniors' Bonus of between $200 and $300 for eligible Singaporeans aged 55 and above.

There is also a doubling of U-Save Rebates provided to households over the next three tranches of disbursement in 2023. In total, eligible households can expect to receive up to $760 in U-Save Rebates this year.

During COVID-19, the Government also introduced a comprehensive suite of measures at the Resilience and Solidarity Budgets. I would not go into details.

Back in 2008 and 2009, during the Global Financial Crisis, the Government also introduced the Resilience Package which included a doubling of Goods and Service Tax (GST) credits and Senior Citizens' Bonus in 2009. There were Service and Conservancy Charges (S&CC) rebates, as well as personal income tax rebate.

To Mr Leong's point further in terms of giving them something as an uplift upon reaching 55, I think there is a very delicate balance and series of trade-offs between that and to provide for a longer-term payout for them. We do not rest on our laurels. We constantly look and review the policy and looking at the broader context of the savings, the percentage of people attaining the BRS; we are not completely closed off. I hope that addresses his question.