Medisave withdrawals allowed for long-term care; new ElderFund to help those most in need
For disabled individuals who are unable to join CareShield Life or have little in their Medisave or personal savings accounts, a new ElderFund scheme will be available from 2020.
SINGAPORE — From 2020, for the first time, severely disabled individuals aged 30 and above will be allowed to withdraw up to S$200 in cash a month from their or their spouses’ Medisave for long-term care needs, if the accounts have at least S$5,000.
And for such disabled individuals who are unable to join CareShield Life or have little in their Medisave or personal savings accounts, a new ElderFund scheme will be available from 2020. It will pay out up to S$250 per month in cash, with no cap on the payout duration.
The Government announced the two measures to help lower-income residents take care of their long-term care needs on Tuesday (July 3) as it revealed more details on the new mandatory severe disability insurance scheme, CareShield Life, which is set to take over the existing ElderShield scheme from 2020. Severely disabled individuals are defined as those who are unable to perform three or more activities of daily living, which include feeding, bathing, dressing and going to the toilet.
Although the Ministry of Health (MOH) pledged to make CareShield Life premiums affordable through temporary and permanent means-tested subsidies, it noted that “personal and family savings are an important source of funding for long-term care needs”.
It acknowledged that lower-income Singaporeans might need additional financial support, and said more details on how to apply for ElderFund will be announced closer to 2020.
On the liberalisation of Medisave withdrawals for long-term care, the MOH said a S$200 monthly cap would apply to every severely disabled individual, even if he or she is supplemented by a spouse’s Medisave. They must have a Medisave balance of S$20,000 and above to withdraw the maximum S$200 per month.
Those with between S$5,000 and no more than S$20,000 in Medisave balance may withdraw between S$50 and S$150 per month for long-term care. Their spouses must have at least S$5,000 in their Medisave accounts for withdrawals to be made.
The cash withdrawals will be jointly administered by the Central Provident Fund (CPF) Board and the Agency for Integrated Care.
According to the MOH, residents aged 65 and above have a median Medisave balance of S$19,000. Close to half have S$20,000 or more, while a quarter of them have S$5,000 or less in their Medisave accounts.
Health Minister Gan Kim Yong said allowing Medisave withdrawals would provide more flexibility in the handling of long-term care needs. They could use the cash to fund non-institutional care services, for example.
“We don’t really want them to consume services that are not really necessary; some of them might have informal care arrangements and will need some financial support to make sure these arrangements are affordable,” he added.
Nevertheless, he said that there will be safeguards and limits to ensure that everyone will have enough in their Medisave accounts to meet their other medical needs.
For those whose spouses’ Medisave accounts have also run dry, Mr Gan said that the Government is “prepared to consider on a case-by-case basis” whether they can tap their children’s or parents’ Medisave accounts.
The Government wants to ensure that every generation has enough Medisave savings for itself, and Medisave adequacy was “at the top of our minds” when the authorities considered relaxing its use, said Mr Gan.
“So far, I think we’re quite confident that Medisave will still be adequate, so current contribution rates will still be adequate to meet the needs (of the population) under the new scheme,” he said.
On ElderFund, Mr Gan said some individuals may have exceptional circumstances or inadequate Medisave.
“I think it’s important for everyone to look into each individual’s circumstances and for the older folks, who may find it very difficult to participate in CareShield Life — we encourage them to discuss with CPF and find out what’s the best option for them,” he said.
