The Central Provident Fund (CPF) system in Singapore is evolving to better support members in building their savings for retirement, housing, and healthcare. Starting in January 2025, eight important changes will take effect, each designed to strengthen CPF’s role as a cornerstone of Singapore’s social security system. Here’s a breakdown of these updates:
1. Closure of Special Account (SA) for Members Aged 55 and Above
From mid-January 2025, CPF members aged 55 and older will see their Special Account (SA) closed. The funds will be transferred to either the Retirement Account (RA) or Ordinary Account (OA), depending on the member’s Full Retirement Sum. Existing investments under the CPF Investment Scheme can still be held, and proceeds will go to the RA after the SA is closed.
2. Higher Enhanced Retirement Sum (ERS)
The Enhanced Retirement Sum (ERS) will increase to S$426,000, up from the current S$308,700. This allows members to set aside a higher amount in their RA and enjoy higher monthly payouts during retirement.
3. Enhanced Matched Retirement Savings Scheme (MRSS)
The MRSS will see significant improvements:
- The matching grant cap will rise from S$600 to S$2,000 per year.
- The age cap of 70 will be removed, extending eligibility to 800,000 members aged 55 and above.
- Tax relief for cash top-ups that attract the matching grant will be removed, though non-matching cash top-ups will still qualify for tax relief.
4. Increased Quarterly Silver Support Scheme Payments
Starting January, payouts under the Silver Support Scheme will increase by 20%. The qualifying income threshold will also rise, allowing more seniors to benefit. The quarterly payouts remain tiered, based on HDB flat type and household income.
5. Workfare Income Supplement Scheme (WIS) Adjustments
The income cap for the Workfare Income Supplement will be raised to S$3,000 (up from S$2,500). Eligible workers can now receive up to S$4,900 per year, compared to S$4,200 currently.
6. CPF Contributions for Platform Workers
From January 1, CPF contributions for platform workers will be deducted as income is earned. Workers born on or after January 1, 1995, will see their CPF contribution rates gradually increase to 20% by 2029, with platform operators contributing up to 17%. Those born before 1995 may opt in for this new system or continue with contributions solely to their MediSave Account.
7. Higher CPF Monthly Salary Ceiling
The monthly salary ceiling for CPF contributions will increase to S$7,400 (up from S$6,000), while the annual ceiling remains at S$102,000. This change will help members grow their CPF savings through higher contributions.
8. Higher Contribution Rates for Senior Workers
CPF contribution rates for workers aged 55 to 65 will increase by up to 1 percentage point. Employers will receive a one-year CPF transition offset to ease the cost impact of higher contributions.
Why These Changes Matter
These updates reflect the government’s commitment to ensuring CPF remains relevant to Singaporeans’ evolving needs. From boosting retirement savings to improving support for lower-income workers and seniors, these measures aim to provide better financial security for all.
Stay informed about these CPF changes as they take effect in 2025. Whether you’re planning for retirement, upgrading your property, or exploring investment opportunities, understanding CPF policies is key to making well-informed decisions.
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