Current Affairs
Using CPF to pay for your flat as you grow older – possible?
by Leong Sze Hian
I refer to the article “More help for low-income families to buy their first flat” (Today, Mar 4).
Ït states that:
“One household which will benefit is Mr Rosli Nodin’s family. Mr Rosli and his wife Saribanon Senin have two young children. They have been living in a one-room rental flat in Bukit Merah for the past 15 years.
Mr Rosli is the sole breadwinner with a take-home pay of about S$1,000 each month – of which S$110 goes towards paying the rent.
Under the SHG (Special Housing Grant), the family will receive S$20,000. They also qualify for another S$40,000 under the Additional Housing Grant (AHG) scheme. With the grants, the family will be able to afford a two-room BTO flat – priced at about S$100,000 – with a S$40,000 loan.
To service the loan, they will have to pay S$181 each month which can be met with Mr Rosli’s CPF contribution”.
With a take-home pay of about S$1,000, his salary is about $1,240, with $244 to his CPF Ordinary Account.
At $181 a month for the mortgage repayment, his S$40,000 HDB loan is for 25 years.
As the HDB normally gives loans up to age 65 (subject to a maximum of 30 years) plus the fact that Mr Rosli has been renting from HDB for 15 years already, we can safely estimate Mr Rosli’s age to be at least 40.
Issue of declining CPF OA contributions
Singaporeans’ CPF contribution that is credited to the Ordinary Account declines with age. That is, as you grow older, your contribution to your CPF OA is less. The OA is what you use to pay your housing mortgage loans.
Here’s a simple look at how much OA contribution you make as you grow older:
Age 35 & below – 23 %
Age 35 & above – 21%
Age 45 – 19 %
Age 50 – 13 %
Age 55 – 11.5%
Age 60 – 3.5%
Age 65 – 1%
Therefore, assuming that Mr Rosli’s salary remains at S$1,240, his Ordinary Account contribution will drop, as follows:
Age 51 – S$161.20
Age 56 – S$142.60
Age 61 – S$43.40
In short, his Ordinary Account contribution will be less than his S$181 monthly mortgage repayment.
His declining CPF contribution will not be able to service his loans as he grows older – unless his salary increases to S$1,392, S$1,574 and S$5,171 when he reaches age 51, 56 and 61, respectively.
As you grow older, you must earn more to pay the same amount of loan because your OA contribution rate gets lower.
With the statistics indicating that low-income workers like Mr Roslihardly hardly having any wage increase over the last ten years or so, what is the likelihood that his salary increase in the future will hit the amounts computed above?
I would also like to point out that even if nominal wages increase in the future, recent history indicates that low-income workers may not be able to catch up with the rising cost of living.
CPF service loan means affordable?
This example illustrates the flaw in the repeated exhortations to Singaporeans that HDB flats are affordable.
The obvious flaw here is the assumption that the entire monthly mortgage can be serviced from one’s CPF, at the contribution rate of the OA at the time of purchase. We should not forget the issue of declining Ordinary Account contributions as one gets older.
Of course, low-income flat buyers like Mr Rosli may have to risk defaulting on his mortgage and the loss of his flat, if he suffers a job loss, pay cut, illness, etc, over the 25 or 30 years of a typical HDB housing loan.
3-room flat example
For a family earning S$2,001, the new SHG is S$5,000 and the AHG is S$30,000.
In the latest Yishun January BTO exercise, the average three-room BTO price is $166,500.
The 30-year housing loan of S$131,500, after deducting the total housing grants of S$35,000, requires a monthly repayment of S$526.
Assuming the flat buyer is 30 years old, the CPF Ordinary Account contribution is $460. This means that $66 has to be paid in cash.
Similar to the example of Mr Rosli, the Ordinary Account contribution of the flat owner will drop as follows:
Age 35 – S$420
Age 45 – S$380
Age 50 – S$260
Age 55 – S$230
Similarly, the salary would have to increase to S$2,190, S$2,421, S$3,538 and S$4,000, at age 36, 46, 51 and 56, respectively, in order to get the same S$460 Ordinary Account contribution of the flat buyer when he first purchased the flat.
In other words, the flat owner’s salary would have to be double what he earned when he first bought the flat – if he is to be able to service his loan through his CPF.
If the flat buyer is older, at say 35, his salary when he crosses 61, would have to be S$13,143!
(Note: I have not factored in the current CPF wage contribution ceiling of S$5,000, which would make the future Ordinary Account contribution even less than my computation above, for age 61.)
I wonder how many flat buyers are aware or were told of the above, when they did their flat purchase financial counselling at HDB.
In this connection, even if the real wage growth target of 30 per cent (40 per cent nominal growth) in the next ten years is achieved, and in future years, his income would only increase to about S$2,801, S$3,922 and S$4,700 in the next 10, 20 and 25 years, respectively.
Would such wage increases be sufficient to cope with the rising costs of living, on top of having to service a mortgage with declining CPF contributions?
Low-income families should be allowed to use their CPF to pay for HDB rental flats, instead of being forced to buy a flat. Otherwise, they run the risk of having to use cash to top up for the shortfall in their CPF contribution, and run the risk of losing their flats and becoming homeless.
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Current Affairs
Reforming Singapore’s defamation laws: Preventing legal weapons against free speech
Opinion: The tragic suicide of Geno Ong, linked to the financial stress from a defamation lawsuit, raises a critical issue: Singapore’s defamation laws need reform. These laws must not be weaponized to silence individuals.
by Alexandar Chia
This week, we hear the tragic story of the suicide of Geno Ong, with Ong citing the financial stress from the defamation lawsuit against her by Raymond Ng and Iris Koh.
Regardless of who’s right and who’s wrong, this Koh/Ng vs Ong affair raises a wider question at play – the issue of Singapore’s defamation laws and how it needs to be tightened.
Why is this needed? This is because defamation suits cannot be weaponised the way they have been in Singapore law. It cannot be used to threaten people into “shutting up”.
Article 14(2)(a) of the Constitution may permit laws to be passed to restrict free speech in the area of defamation, but it does not remove the fact that Article 14(1)(a) is still law, and it permits freedom of speech.
As such, although Article 14(2)(a) allows restrictions to be placed on freedom of speech with regard to the issue of defamation, it must not be to the extent where Article 14(1)(a)’s rights and liberties are not curtailed completely or heavily infringed on.
Sadly, that is the case with regard to precedence in defamation suits.
Let’s have a look at the defamation suit then-PM Goh Chok Tong filed against Dr Chee Soon Juan after GE 2001 for questions Dr Chee asked publicly about a $17 billion loan made to Suharto.
If we look at point 12 of the above link, in the “lawyer’s letter” sent to Dr Chee, Goh’s case of himself being defamed centred on lines Dr Chee used in his question, such as “you can run but you can’t hide”, and “did he not tell you about the $17 billion loan”?
In the West, such lines of questioning are easily understood at worse as hyperbolically figurative expressions with the gist of the meaning behind such questioning on why the loan to Suharto was made.
Unfortunately, Singapore’s defamation laws saw Dr Chee’s actions of imputing ill motives on Goh, when in the West, it is expected of incumbents to take the kind of questions Dr Chee asked, and such questions asked of incumbent office holders are not uncommon.
And the law permits pretty flimsy reasons such as “withdrawal of allegations” to be used as a deciding factor if a statement is defamatory or not – this is as per points 66-69 of the judgement.
This is not to imply or impute ill intent on Singapore courts. Rather, it shows how defamation laws in Singapore needs to be tightened, to ensure that a possible future scenario where it is weaponised as a “shut-up tool”, occurs.
These are how I suggest it is to be done –
- The law has to make mandatory, that for a case to go into a full lawsuit, there has to be a 3-round exchange of talking points and two attempts at legal mediation.
- Summary judgment should be banned from defamation suits, unless if one party fails to adduce evidence or a defence.
- A statement is to be proven false, hence, defamatory, if there is strictly material along with circumstantial evidence showing that the statement is false. Apologies and related should not be used as main determinants, given how many of these statements are made in the heat of the moment, from the natural feelings of threat and intimidation from a defamation suit.
- A question should only be considered defamatory if it has been repeated, after material facts of evidence are produced showing, beyond reasonable doubt, that the message behind the question, is “not so”, and if there is a directly mentioned subject in the question. For example, if an Opposition MP, Mr A, was found to be poisoned with a banned substance, and I ask openly on how Mr A got access to that substance, given that its banned, I can’t be found to have “defamed the government” with the question as 1) the government was not mentioned directly and 2) if the government has not produced material evidence that they indeed had no role in the poisoning affair, if they were directly mentioned.
- Damages should be tiered, with these tiers coded into the Defamation Act – the highest quantum of damages (i.e. those of a six-figured nature) is only to be reserved if the subject of defamation lost any form of office, revenue or position, or directly quantifiable public standing, or was subjected to criminal action, because of the act of defamation. If none of such occur, the maximum amount of damages a plaintiff in a defamation can claim is a 4-figure amount capped at $2000. This will prevent rich and powerful figures from using defamation suits and 6-figure damages to intimidate their questioners and detractors.
- All defendants of defamation suit should be allowed full access to legal aid schemes.
Again, this piece does not suggest bad-faith malpractice by the courts in Singapore. Rather, it is to suggest how to tighten up defamation laws to avoid it being used as the silencing hatchet.
Current Affairs
Man arrested for alleged housebreaking and theft of mobile phones in Yishun
A 23-year-old man was arrested for allegedly breaking into a Yishun Ring Road rental flat and stealing eight mobile phones worth S$3,400 from five tenants. The Singapore Police responded swiftly on 1 September, identifying and apprehending the suspect on the same day. The man has been charged with housebreaking, which carries a potential 10-year jail term.
SINGAPORE: A 23-year-old man has been arrested for allegedly breaking into a rental flat along Yishun Ring Road and stealing eight mobile phones from five tenants.
The incident occurred in the early hours on Sunday (1 September), according to a statement from the Singapore Police Force.
The authorities reported that they received a call for assistance at around 5 a.m. on that day.
Officers from the Woodlands Police Division quickly responded and, through ground enquiries and police camera footage, were able to identify and apprehend the suspect on the same day.
The stolen mobile phones, with an estimated total value of approximately S$3,400, were recovered hidden under a nearby bin.
The suspect was charged in court on Monday with housebreaking with the intent to commit theft.
If convicted, he could face a jail term of up to 10 years and a fine.
In light of this incident, the police have advised property owners to take precautions to prevent similar crimes.
They recommend securing all doors, windows, and other openings with good quality grilles and padlocks when leaving premises unattended, even for short periods.
The installation of burglar alarms, motion sensor lights, and CCTV cameras to cover access points is also advised. Additionally, residents are urged to avoid keeping large sums of cash and valuables in their homes.
The investigation is ongoing.
Last month, police disclosed that a recent uptick in housebreaking incidents in private residential estates across Singapore has been traced to foreign syndicates, primarily involving Chinese nationals.
Preliminary investigations indicate that these syndicates operate in small groups, targeting homes by scaling perimeter walls or fences.
The suspects are believed to be transient travelers who enter Singapore on Social Visit Passes, typically just a day or two before committing the crimes.
Before this recent surge in break-ins, housebreaking cases were on the decline, with 59 reported in the first half of this year compared to 70 during the same period last year.
However, between 1 June and 4 August 2024, there were 10 reported housebreaking incidents, predominantly in private estates around the Rail Corridor and Bukit Timah Road.
The SPF has intensified efforts to engage residents near high-risk areas by distributing crime prevention advisories, erecting alert signs, and training them to patrol their neighborhoods, leading to an increase in reports of suspicious activity.
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