Tuesday, 26 September 2023

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Medisave – pay up or be charged?

Leong Sze Hian

Several Singaporeans living overseas and in Singapore have contacted The Online Citizen to tell us that they have received letters from the CPF Board asking them to pay their CPF Medisave arrears, incurred many years ago.

For example, Jane (not her real name), has been married to a European citizen, working and living in Europe, since 2003.

She had not received any letters from the CPF Board for several years, until the recent demand letter arrived at her European address. The letter said: “Failure to pay Medisave contributions is an offence under the CPF Act and is liable for composition fine and possibly Court action.”

She was self-employed and was struggling to pay her full Medisave contributions consistently, as she had to support her bankrupt father, ailing mother and sibling who was studying.

About eight years ago, under threat of being charged in court, she struggled to pay about $500 a month under an installment plan worked out with the CPF Board for about a year, but was unable to continue for the rest of the agreed installment period of about 2 years.

Her outstanding Medisave arrears is now about $12,000.

As she is only earning about 1,000 Euros a month now, she is not able to pay her Medisave arrears.

She is afraid that if she is charged in court, and if a warrant of arrest is issued, as we understand is normally the case for those who don’t turn up, she fears that she may be arrested if she comes home to visit her family.

She wonders if her only solution to her “Medisave” predicament is to give up her citizenship.

Or is she condemned to a lifetime exile form her country of birth?

Since she is living in Europe and will not return to Singapore, even if she is able to pay her Medisave arrears, what is the point of asking her to contribute, as she may never be able to use her Medisave which is restricted for use in Singapore and 12 approved hospitals in Malaysia since March this year?

Another example is John, who is a retired civil servant, and receives a pension and free lifetime medical benefits.

He too has been served with letters of demand and threat of court action for Medisave arrears incurred as a self-employed person.

When he told the CPF Board that it was pointless for him to contribute to Medisave even if he could afford to, because he gets free medical treatment, he was told that he could use his Medisave for his wife.

When he told them that his wife was also a civil service pensioner with free medical benefits, he was told that he could use it for his children.

When he told them that he has no children, he was told that it was required by law to contribute to Medisave.

I wonder how many people in Singapore or Singaporeans living overseas, owe Medisave, and have received letters of demand.

Are these letters of demand being sent to Singapore permanent residents (PRs) living in Malaysia, who owe Medisave too?

How many will be served with court action?

Self-employed persons are required to contribute to Medisave if they earn more than $6,000 a year.

If you earn just $500 a month, how do you survive?

If you are struggling to survive, how can you afford to make Medisave contributions?

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