Details of CPF Changes from 1 July 2006

[Dennis Ng]

there have been some CPF changes that took effect on 1 July 2006, the detailed changes are below. http://www.HousingLoanSG.com

I. Transfer excess Medisave Account (MA) contributions
Contributions to Medisave Account (MA) in excess of Medisave Contribution Ceiling are automatically transferred to :
Current
Members Ordinary Accounts (OA).

From 1st July 2006
Members Age below 55
Special Account (SA).
If SA balance (inclusive of amounts withdrawn under CPFIS-SA) has reached the prevailing Minimum Sum, excess MA would go into their Ordinary Account (OA).

Members aged 55 and above
Retirement Account (RA)
If RA has been topped up to cover any Minimum Sum shortfall, MA would go into their OA.


II. Restrictions on use of CPF savings for multiple property purchases
Current
Members can use CPF savings to purchase more than one property.


From 1st July 2006
Members can only use their CPF savings for the purchase of their second and subsequent properties provided they are able to set aside the Minimum Sum cash component.

This policy is applicable to members who already own a property bought with their CPF savings and wish to buy another property with CPF from 1 July 06. Members who own multiple properties bought with CPF savings before 1 July 2006 will not be affected by the policy change unless they subsequently buy another property using their CPF savings.

III. Phasing Out of Non-Residential Properties Scheme (NRPS)
Current
CPF savings can be used to buy non-residential properties.


From 1st July 2006
The Board will no longer approve any NRPS applications.

IV. Increase in CPF Minimum Sum, Medisave Minimum Sum and Medisave Contribution Ceiling
CPF Minimum Sum



Medisave Minimum Sum


Medisave Contribution
From 1st July 2006
Increased from $90,000 to $94,600. The new amount will apply to CPF members who turn 55 from 1 July 2006 to 30 June 2007.
Increased from $27,500 to $28,000. This amount will apply to members who withdraw their CPF at or after 55 years old.

Raised from $32,500 to $33,000. This amount is the maximum balance each member may have in his Medisave Account.