Income Ceiling Ensures HDB grant Is For First-Timers

Source : The Straits Times, Forum, Sep 4, 2007

I REFER to the letter, 'Time to review $8,000 HDB income ceiling?' by Ms Lai Ga Wai (ST, Aug 14) and 'How about housing perks for the middle-income?' by Ms Bernice Swee Wern Foong (ST, Aug 22).

Public housing subsidies are primarily meant for citizen families to buy and own their first HDB flat. The purpose of the income ceiling is to ensure the Government's limited housing subsidies are given to those who need them more. With the current income ceiling of $8,000 a month, about eight in 10 Singaporean households are eligible to buy a subsidised HDB flat. As the vast majority of Singaporean families qualify for subsidised public housing, HDB currently has no plans to raise the income ceiling.

Households with incomes beyond $8,000 per month can consider other housing options, including buying resale HDB flats. First-time families with household incomes of up to $10,000 can also consider buying new executive condominium (EC) units, with a subsidy in the form of a $30,000 EC housing grant.

Ms Lai said a couple with $8,000 in monthly income who bought a new five-room flat at $456,000, would not have sufficient CPF savings remaining to meet the CPF Minimum Sum. This is incorrect. She has failed to include the CPF Special Account contributions of the couple which will amount to an additional $294,000 when they reach 62 years, at the prevailing Special Account interest rate of 4 per cent per annum. This is more than sufficient to make up the stipulated Minimum Sum of $180,000 for a married couple in the year 2013.

To supplement their CPF savings, the HDB has also put in place various monetisation options for elderly households to unlock the value of their HDB flats. These include subletting a room, or selling the flat and moving to a smaller flat or studio apartment. The HDB will also implement a Lease Buyback Scheme to buy back part of the lease of smaller flats in return for a steady stream of retirement income for the elderly flat owner.

Leong Chok Keh
Deputy Director (Policy & Property)
for Director (Estate Administration & Property)
Housing & Development Board