Budget 2024: 1.6 million older Singaporeans to benefit from $8.2 billion Majulah Package
Some 1.6 million lower and middle income Singaporeans currently in their 50s and 60s will get more help to boost their retirement adequacy under the Majulah Package.
The package was announced at the National Day Rally in 2023 and is expected to have a total lifetime cost of about $8.2 billion.
It covers younger seniors in their 50s and early 60s, as well as those of the Merdeka Generation who were born between 1950 and 1959, and those of the Pioneer Generation who were born in 1949 or earlier.
In order to honour this commitment without burdening future generations, Deputy Prime Minister and Finance Minister Lawrence Wong said that he will set aside $7.5 billion in a new fund, the Majulah Package Fund. He said that this will be enough to cover the lifetime cost of the package, after accounting for the investment income of the fund.
Mr Wong added that all Singaporeans born in 1973 or earlier will benefit from at least one component of the Majulah Package.
Details on the eligibility criteria for the three-part package were released on Feb 16.
The first component of the package is the Earn and Save Bonus (ESB), which provides lower- and middle-income workers with a CPF bonus of between $400 to $1,000 yearly. This bonus will be credited into the recipient’s CPF account, on top of the usual employer and employee contributions.
To qualify, the recipient must remain in the workforce, whether full-time or part-time. They must have an average monthly income of between $500 and $6,000. Eligibility for the ESB will be assessed annually, based on information from the preceding year. It will be tiered by the recipient’s average monthly income.
The first annual ESB will be credited to eligible recipients’ CPF Retirement Account (RA) or Special Account (SA) in March 2025.
To further prepare older Singaporeans for retirement, the package will also include a Retirement Savings Bonus (RSB), for those whose CPF balances have not reached the CPF Basic Retirement Sum. As at 31 December 2022, the CPF BRS is $99,400. Seniors whose CPF retirement savings fall under this sum will receive the one-time bonus.
They can expect to receive between $1,000 and $1,500 credited to their CPF RA or SA in Dec 2024.
Both bonuses are applicable only to seniors who live in a residence with an annual value of $25,000 or below. They also cannot own more than one property.
Unlike the ESB and RSB which benefit those who meet income and other eligibility criteria, the third component, a one-time MediSave Bonus, will be provided to all seniors who meet the age requirement.
Mr Wong said: “Young seniors with less means will be given the higher tier of $1,500, and all other seniors will receive $750.”
This bonus is tiered based on the recipient’s year of birth, the annual value of their residence and whether they own more than one property. The bonus will be credited into their CPF MediSave Account in Dec 2024.
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