Singapore Budget 2015 : CPF Enhancements

News Released by: Central Provident Fund Board

Singapore Budget 2015 : CPF Enhancements

Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam announced the following enhancements relating to CPF during the FY2015 Budget Statement in Parliament on 23 February 2015:

For information issued by Ministry of Manpower, please click here.

For more details of Singapore Budget 2015, please click here.

Enhancing CPF Savings

Higher CPF Salary Ceiling

To keep pace with income growth over the years, the CPF Salary Ceiling (i.e. Ordinary Wage Ceiling) will be raised from $5,000 to $6,000 with effect from 1 January 2016.

Increase in CPF Contribution Rates for Older Workers

The CPF contribution rates for workers aged above 50 years to 65 years will increase according to the schedule shown in the table below.

Increase in CPF contribution rates for older workers from 1 January 2016

Employee’s age (years)	Increase in contribution rates (% of wages)
Employee’s age (years)	Contribution by employer	Contribution by employee	Total
Above 50 to 55	+1	+1	+2
Above 55 to 60	+1	–	+1
Above 60 to 65	+0.5	–	+0.5

The increase in employer contribution rates will be allocated to the Special Account. The increase in employee contribution rates will be allocated to the Ordinary Account.

The increase will apply to all wages earned from 1 January 2016. Click here for the CPF contribution rates from 1 January 2016.

Read more details from the FAQs on this initiative.

Enhancement and Extension of the Temporary Employment Credit (TEC)

The TEC will be enhanced in 2015 and extended to 2017 to help employers adjust to cost increases associated with the increase in CPF salary ceiling and the employer CPF contribution rates for older workers.

In 2015, employers will receive an offset of 1% of wages for Singaporean and Permanent Resident workers up to the CPF salary ceiling of $5,000. *

In 2016, employers will receive an offset of 1% of wages for Singaporean and Permanent Resident workers up to the CPF salary ceiling of $6,000.

In 2017, employers will receive an offset of 0.5% of wages for Singaporean and Permanent Resident workers up to the CPF salary ceiling of $6,000.

TEC payments will be made based on employees’ income paid in the respective year.

* This includes the 0.5% offset of wages that was announced at Budget 2014 as a one-year assistance to employers to cope with wage costs arising from the increase in CPF contribution rates to the Medisave Account.

Enhancements to the Special Employment Credit (SEC)

To promote voluntary re-employment of older workers, employers who hire Singaporean workers aged 65 and above earning up to $4,000 a month will receive an additional offset of up to 3% of wages in 2015.

Taken together with the existing SEC incentives, employers who employ such older workers would get up to 11.5% in wage offset in 2015.

Read this factsheet for more details on TEC and SEC.

Providing Greater Support in Retirement

Extra 1% Interest on First $30,000 of Balances from Age 55

To make the CPF system more progressive, the Government will provide an additional 1% Extra Interest on the first $30,000 of CPF balances from the age of 55 with effect from 1 January 2016. This is on top of the existing 1% Extra Interest provided on the first $60,000 of CPF balances.

Read this factsheet and FAQs for more details on the Extra Interest.

Silver Support Scheme

The new Silver Support Scheme will provide an income supplement of $300 to $750 per quarter to 20-30% of elderly Singaporeans with lesser means in their retirement years. Eligibility will take into consideration:

A person’s lifetime wages, reflected by the total CPF contributions accumulated by a person over the years;

The flat type he lives in – Silver Support will be extended to those who are staying in 5-room HDB flats or smaller; and

A person’s household income

The eligibility assessment will be done automatically and there is no need for any application. This will be implemented around the first quarter of 2016. More details will be provided closer to implementation.

Read this factsheet for more details on this initiative.