The government is giving a special bonus to encourage Singaporeans to join the National Lifelong Income Scheme or CPF Life, which is set to begin in 2013.
The special bonus, called Life Bonus or L-Bonus, is targeted at lower and middle-income CPF members. The one-off incentive will be given to the first five cohorts of CPF members – aged between 46 and 50 this year – who participate in the scheme. They will receive the L-Bonus when they enrol in the scheme at 55 years old.
Public Relations Officer Yohendiran Raj Santhanam is turning 48 this year. And the government has been actively asking Singaporeans like him to make sure they have enough savings to sustain them for life.
Under the newly introduced CPF Life, those below 50 years old this year, with a Minimum Sum of S$40,000 in their CPF account, will be automatically covered. Those 50 and older are encouraged to opt into the scheme.
To get as many Singaporeans on board the scheme, the government will give out the Life Bonus to CPF members who are willing to make a reasonable contribution to their balances and accept lower monthly payouts.
This is particularly important for women who may have been housewives or who have stopped working early and do not have enough in their CPF accounts.
The L-Bonus will also help to encourage their husbands or other family members to top up their accounts so that they can join the scheme.
Mr Raj said: "It's very good news for people like us. We don't have much in the CPF, so this will enable me to work and reach the target. It will also help me in the future.
"The one-off bonus will encourage everyone to work harder and meet the target – it'll be a win-win situation for everyone. The government is helping us in this, we must also do our part and work towards that goal – the Minimum Sum goal."
So who will qualify for the L-Bonus?
Those whose annual income is S$54,000 or less when they sign on to CPF Life, and if their annual assessed property value is S$11,000 or less, which covers all HDB flats, will qualify for the L-Bonus.
These people make up about 80 percent of the cohort aged 50 today. It will also include those who do not have S$40,000 in their Minimum Sum, but want to opt into CPF Life.
The amount of the L-Bonus will vary so that older and less well-off CPF members will receive more. Those aged 50 this year can expect to receive between S$2,200 and S$4,000.
The government will set aside S$770 million over three years for the L-Bonuses, which includes S$260 million from this year's Budget. - CNA/so
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