Monday, April 20, 2009

200 Elderly Signed Up

Source : The Straits Times, April 20, 2009

HDB Lease Buyback Scheme

Proceeds used to pay for annuity from CPF Board

DRAWN by the promise of an income for life, caretaker Adali Sadap, 74, was one of several Ang Mo Kio residents who signed up for the HDB's Lease Buyback Scheme on Sunday.

Madam G. Yap, 69, seated beside Prime Minister Lee Hsien Loong, was among the Ang Mo Kio GRC residents considering the Lease Buyback Scheme yesterday. With them are GRC MPs Balaji Sadasivan and Lee Bee Wah. The scheme, which is for owners of three-room or smaller flats, offers those who qualify for it an income for life. -- ST PHOTO: CHEW SENG KIM

About 200 elderly Singaporeans in all have taken up the offer since its launch last month, Prime Minister Lee Hsien Loong said at a roadshow pitching the scheme to his constituents.

Those who qualify will sell to the Housing Board (HDB) the tail-end of their lease at market rate, and the proceeds will be used to buy an annuity from the Central Provident Fund Board.

This annuity could give Mr Adali and his wife, who is 69, a total of about $600 a month throughout their life.

'I consulted my family, and they all feel the scheme is beneficial to us,' said the father of 11 who bought his three-room flat in 1981 for $21,900.

It is now worth $248,000, he said, adding that he makes about $600 a month as a mosque caretaker.

The rise in value of HDB homes over time was also noted by Mr Lee in his speech at Nanyang Polytechnic to some 1,000 elderly constituents.

He said the Lease Buyback Scheme was possible because of Singapore's highly successful home ownership programme.

'Even now, in an economic downturn, everybody not only has a roof over their heads, but a property which has appreciated in value over the years,' he noted.

Read the full story in Monday's edition of The Straits Times.

How the HDB scheme works

Who qualifies?

# Singaporeans who own three-room or smaller HDB flats where the remaining mortgage is $5,000 or lower.

# They must be aged 62 or older, have a household income of $3,000 or less and owned the flat for at least five years.

# They must not own or have owned a larger property. Also, they must have received only one housing subsidy.

What they get

# A monthly payout that can range from $470 to $800, depending on their age and the flat's market value.

# A $10,000 subsidy: $5,000 in cash and $5,000 towards the Central Provident Fund annuity.

# If the owner dies before his remaining lease runs out, his family gets a refund of the balance and the unused annuity.

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