S$7 billion Majulah Package to give CPF top-ups to those born in 1973 or earlier

SINGAPORE: Central Provident Fund (CPF) top-ups will be given to Singaporeans who are aged 50 and above this year - or those born in 1973 or earlier - as part of a new S$7 billion package to boost retirement savings.

Called the Majulah Package, it is aimed at extending help to "young seniors", with more support for those with lower incomes and less wealth, Prime Minister Lee Hsien Loong announced in his National Day Rally speech on Sunday (Aug 20).

But the package will also cover the Merdeka and Pioneer generations. 

It will benefit 1.4 million older people, said Mr Lee. 

Speaking at the Institute of Technical Education headquarters in Ang Mo Kio, Mr Lee said the support will be tiered, depending on an individual’s income and CPF savings.

The Majulah Package consists of three components, the first of which is an Earn and Save Bonus for eligible seniors who are working. Lower- and middle-income workers will get extra CPF funds of up to S$1,000 a year. This will be credited to their CPF accounts on top of the usual employer and employee contributions.

Eligible individuals will receive this bonus yearly as long as they are working, whether it is part-time or full-time work. 

“Most young seniors are still working and have some years to go before retirement. We encourage you to continue working as long as you can,” said Mr Lee.

The second component of the Majulah Package is a Retirement Savings Bonus for those who have not met the CPF Basic Retirement Sum. They will receive a one-time CPF bonus of up to S$1,500. 

This also applies to those who are not working, including homemakers who have given up their careers to raise their families, Mr Lee said. 

The third element of the package is a one-time MediSave Bonus of up to S$1,000. This will help provide “some extra buffer” to help pay medical expenses and insurance premiums, explained Mr Lee.

Those in the Pioneer Generation and Merdeka Generation will receive the Earn and Save Bonus if they are still working and meet the income criteria, said Mr Lee. And those who are not working can still get something from the Retirement Savings Bonus and MediSave Bonus, he added.

“This will be in addition to the PG (Pioneer Generation) or MG (Merdeka Generation) benefits that you are already receiving and will continue to receive. Think of this as a 58th National Day present!” Mr Lee said.

The Ministry of Manpower (MOM) said separately that the package benefits are means-tested to ensure that support goes to those who need it the most. 

The eligibility criteria for the various benefits will include factors such as income, annual value of residence, whether the individual owns more than one property, as well as CPF savings. More details will be announced in 2024.

The minimum amounts for those eligible for the Earn and Save Bonus, Retirement Savings Bonus and MediSave Bonus are S$400, S$1,000 and S$500 respectively, said MOM.

The Ministry of Finance will create a new fund to meet the full lifetime costs of the Majulah Package, using resources from this term of government, said Mr Lee. “We will honour this commitment without burdening future generations,” he added.

Explaining why the Majulah Package benefits will not be paid in cash, MOM noted that the measures are meant to help older Singaporeans with their retirement and healthcare needs.

“Monies in the CPF accounts will grow with interest and can be streamed out via monthly CPF payouts in retirement, or used directly for their healthcare needs,” it added.

The government will also enhance existing schemes such as the Silver Support scheme, Workfare Income Supplement scheme, as well as the Matched Retirement Savings Scheme, with details to be announced next year, added the Prime Minister.

The Silver Support scheme provides a quarterly cash supplement to seniors who had low incomes during their working years and have less in retirement, while the Workfare Income Supplement scheme tops up the salaries of lower-income workers to help them save for retirement. 

Launched in 2021, the Matched Retirement Savings Scheme matches cash top-ups made to the Retirement Accounts (RA) of senior Singapore citizens with lower retirement savings.

For the Majulah Package, there is no need to have obtained citizenship by a certain year to be eligible.

“The government imposed a citizenship attainment criterion for the Pioneer and Merdeka Generation Packages, as these were universal packages that were intended to be a gesture of our nation’s appreciation for our seniors who had contributed to building Singapore during the early years,” said MOM.

“For the Majulah Package, the support is targeted at those with greater need … those with lower incomes or less CPF savings. Like our other means-tested support schemes, we do not impose a citizenship attainment criterion. All Singapore citizens who meet the eligibility criteria will benefit.”

Details on when the Majulah Package benefits will be given out will be announced next year, added the ministry.

“Taken together, these improvements will help seniors to meet basic retirement needs, especially for lower- and middle-income Singaporeans,” Mr Lee said. “So that you can have greater peace of mind in your golden years.”