The CPF employer contribution rate will be increased by one percentage point for all workers.The increase will be channelled to the Medisave Account to help workers save for their future healthcare expenses.
Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam made the announcement during his annual Budget Speech on Friday. To help employers manage the CPF rate increase, the government will provide a 50 per cent offset through a one-year Temporary Employment Credit (TEC).
Employers will receive an offset of 0.5 percentage point of wages, up to the CPF ceiling of S$5,000. Both the CPF contribution rate change and the TEC will take effect from January 2015. Mr Tharman said that with higher Medisave contributions, it will allow elderly Singaporeans to use a portion of their Medisave more flexibly across a range of outpatient treatments.
The government also announced higher subsidies for services at Specialist Outpatient Clinics (SOC), to be implemented from this September. Currently, all subsidised patients enjoy 50 per cent subsidy for general Specialist Outpatient Clinics services, including consultation and diagnostic tests.
From September, subsidies will be raised for lower and middle income Singaporeans to 70 per cent and 60 per cent respectively. For example, a lower-income individual in his fifties suffering from a chronic condition like hypertension may fork out about S$480 for his annual SOC charges.
But with the new changes, his expenditure can be reduced by almost half to S$265. This is expected to benefit some 400,000 patients. It will cost the government an additional S$123 million per year.
To keep MediShield Life premiums affordable for the lower and middle income groups, the government will provide them with significant permanent subsidies so that they can fully pay their remaining premiums out of their regular Medisave contributions. To ease the transition into MediShield, the government will also provide a subsidy to offset premium increases for the first few years, including those who are in the higher income bracket.
Details of the subsidies will be finalised after the MediShield Life Review Committee completes its work, which is expected to be in June.
Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam made the announcement during his annual Budget Speech on Friday. To help employers manage the CPF rate increase, the government will provide a 50 per cent offset through a one-year Temporary Employment Credit (TEC).
Employers will receive an offset of 0.5 percentage point of wages, up to the CPF ceiling of S$5,000. Both the CPF contribution rate change and the TEC will take effect from January 2015. Mr Tharman said that with higher Medisave contributions, it will allow elderly Singaporeans to use a portion of their Medisave more flexibly across a range of outpatient treatments.
The government also announced higher subsidies for services at Specialist Outpatient Clinics (SOC), to be implemented from this September. Currently, all subsidised patients enjoy 50 per cent subsidy for general Specialist Outpatient Clinics services, including consultation and diagnostic tests.
From September, subsidies will be raised for lower and middle income Singaporeans to 70 per cent and 60 per cent respectively. For example, a lower-income individual in his fifties suffering from a chronic condition like hypertension may fork out about S$480 for his annual SOC charges.
But with the new changes, his expenditure can be reduced by almost half to S$265. This is expected to benefit some 400,000 patients. It will cost the government an additional S$123 million per year.
To keep MediShield Life premiums affordable for the lower and middle income groups, the government will provide them with significant permanent subsidies so that they can fully pay their remaining premiums out of their regular Medisave contributions. To ease the transition into MediShield, the government will also provide a subsidy to offset premium increases for the first few years, including those who are in the higher income bracket.
Details of the subsidies will be finalised after the MediShield Life Review Committee completes its work, which is expected to be in June.
