Deputy Prime Minister and Minister for Finance Lawrence Wong had announced three changes related to CPF during the FY2023 Budget Statement in Parliament on 14 February 2023. CPF Board had also announced two additional changes on 15 February 2023.
On 1 March 2023, the Ministry of Manpower shared a new initiative to help boost the retirement adequacy of Platform Workers. On 3 and 4 March 2023, the Ministry of Health shared the increased uses for MediSave and the increase in MediShield Life claim limit for cancer drug services respectively.
These changes enable more members to benefit from CPF.
14 February 2023
1. Increase in the CPF monthly salary ceiling
The CPF monthly salary ceiling sets the maximum amount of CPF contributions payable for Ordinary Wages and is currently set at $6,000. To keep pace with rising salaries, the monthly salary ceiling will be raised from $6,000 to $8,000 by 2026. The increase will take place in four steps to allow employers and employees to adjust to the changes.
The CPF annual salary ceiling sets the maximum amount of CPF contributions payable for all salaries received in the year, inclusive of both Ordinary Wages and Additional Wages. There will be no change to the current CPF annual salary ceiling of $102,000. This will be reviewed periodically to ensure that it continues to cover about 80% of employees.
Please refer to the table below for the CPF monthly and annual salary ceilings from 2023 to 2026.
For more information, please refer to the FAQs.
2. Increase in CPF contribution rates for senior workers and CPF Transition Offset
To continue strengthening the retirement adequacy of our senior workers, the employer and employee CPF contribution rates for employees aged above 55 to 70 will be raised by up to 1 percentage point each from 1 January 2024. As with previous increases, this increase will be fully allocated to the Special Account to help senior workers save more for retirement.
A one-year CPF Transition Offset equivalent to half of the 2024 increase in employer CPF contribution rates will be provided to employers to mitigate the rise in business costs due to this increase. This will be provided automatically and employers need not apply for the offset.
For more information, please refer to the FAQs.
3. Increase in minimum CPF monthly payouts for non-CPF LIFE members
From June 2023, the minimum CPF monthly payout for non-CPF LIFE members, i.e. those on the Retirement Sum Scheme, will be raised from $250 to $350 per month. Members who are currently receiving less than $350 per month will thus receive higher monthly payouts until their CPF savings are depleted.
15 February 2023
4. Automatic commencement of monthly payouts for all seniors, including those born before 1948
The fundamental purpose of CPF savings is to provide CPF members with monthly payouts in their retirement. CPF members can instruct CPF Board to start payouts from age 65. Prior to 2018, many members neglected to do so. Therefore, a change was introduced in 2018 where members who reached the age of 70 (i.e. cohorts born on or after 1948) would automatically receive payouts. This was positively received as the seamless process had allowed CPF members to enjoy their CPF savings which they had accumulated during their working years.
It is timely to extend this automatic commencement of monthly payouts to cohorts born before 1948. From June 2023, about 85,000 of them will start receiving payouts in their coming birth month in their personal bank account. They will be individually notified beforehand.
5. Boosting CPF LIFE payouts with savings in the Ordinary and Special Account
Members who have started receiving their CPF LIFE payout may have received subsequent inflows to their Ordinary and Special Account (OSA). If they have not set aside their cohort Full Retirement Sum (FRS), such inflows may not be withdrawable in a lump sum and are meant to be streamed out as monthly payouts. These members currently need to instruct CPF Board to annuitise their OSA savings so that they may receive a higher CPF LIFE payout.
From October 2023, CPF Board will make it easier for such members to enjoy higher monthly CPF LIFE payouts. Any savings in their OSA which cannot be withdrawn in a lump sum will be automatically annuitised for higher CPF LIFE payouts and members will be individually notified prior to the annuitisation. This will enable about 7,000 members who are currently on CPF LIFE and many more in the future to have higher monthly payouts for life.
Members who have set aside their cohort FRS will not have their savings in the OSA automatically annuitised so that those savings remain withdrawable at any time.
The measures at (3) to (5) enable more seniors to benefit from CPF monthly payouts in retirement. These measures will not change the rules for lump sum withdrawals and the amount that members can withdraw from age 55. Members can visit cpf.gov.sg/retirement-income to find out more on how they can benefit from their CPF monthly payouts.
1 March 2023
6. CPF Contribution and Transition Support for Platform Workers
To strengthen the retirement adequacy of Platform Workers (PW), CPF contributions will be made mandatory for PWs born in or after 1995. The contribution rates of PWs and the platform companies will be aligned to those of employees and employers respectively. This change will be implemented over 5 years from the second half of 2024. PWs born before 1995 can choose to opt in to make CPF contributions.
To support PWs who earn $2,500 or less a month, the Government will introduce the Platform Workers CPF Transition Support (PCTS) from 2024 to 2027. The PCTS will offset the additional contributions made by PWs to their CPF Ordinary and Special Account (OSA). The support offered under PCTS will start at 75% in 2024 and will taper down gradually to 25% of the additional contributions to CPF OSA by 2027
In addition, PWs eligible for Workfare Income Supplement (WIS) payments will receive the payments monthly instead of annually from the second half of 2024. With effect from 2028, WIS payments will be increased from $2,800 to $4,200 per year for eligible PWs whose CPF contribution rates are aligned to that of employees. PWs will receive 40% of their WIS payments in cash.
More information on CPF Contribution and Transition Support for Platform Workers
3 March 2023
7. Extension of MediSave coverage to homebound patients receiving home medical and home nursing services
To improve affordability for patients who seek care at home, from the second half of 2023, homebound patients can use MediSave 500/700 and Flexi-MediSave schemes to pay for home medical care services. This will apply to home care services provided by home medical and home nursing providers that are receiving subvention and support from MOH.
8. Use of MediSave for Chronic Disease Management Programme teleconsultations to continue
The usage of MediSave was extended to teleconsultations for chronic disease management during the pandemic for a time-limited period. As telehealth is now widely accepted and demonstrated to be effective, patients will be able to continue to pay for teleconsultations for chronic disease management with MediSave.
4 March 2023
9. Higher MediShield Life claim limit for cancer drug services
To ensure the affordability of cancer drug treatments and sustainability of insurance premiums in the long term, the Ministry of Health had introduced a separate claim limit for outpatient cancer drug services on 1 September 2022. This covers costs that might be incurred over the course of one’s cancer drug treatment such as scans, blood tests, doctor consultations and supportive care drugs. The MediShield Life and MediSave limit for these services were set at $1,200 and $600 per calendar year respectively.
After a review of the latest claims data and feedback that the claim limit may not be adequate for patients who require more frequent tests or more supportive care drugs to manage their side effects, the MediShield Life claim limit for cancer drug services will be increased to $3,600 per calendar year from 1 April 2023. There is no change to the MediSave withdrawal limit of $600 per calendar year.
Patients who have made cancer drug services claims in 2023 will be able to make additional MediShield Life claims from 1 April 2023, up to the new limit.
Watch these videos summarising the CPF-related changes.