By Leong Sze Hian

Mr and Mrs Chan (not their real name), are both 64 years old, and they purchased a HDB Studio Apartment for $69,600 in December 2010.

They paid the required downpayment of $3,480 from their  Central Provident Fund (CPF) and have been informed that their studio flat is expected to be ready in the 3rd quarter of 2013. (original expected date of completion was January 2014). His CPF account has $96,277, $429, $183 and $23,923, in his Retirement Account (RA), Ordinary Account (OA), Special Account (SA) and Medisave Account (MA) respectively.

His wife has about $6,000 and $1,000 in RA and MA respectively.

He has been told that he can only use about $42,000 from his CPF to pay for the Studio flat (although he has $96,227 in his RA) because “only RA savings in excess of the Minimum Sum cash component (excluding interest accrued) can be used for housing”.

His wife cannot use a single cent from her RA to pay for their Studio flat.

So, he has to pay a shortfall balance of about $25,000 in cash when his studio flat is ready in about a few months time.

He earns about $2,500 a month and is currently paying $1.500 rental for a HDB flat.

Mr Chan is unable to get a bank loan or a HDB loan (for just about 1 year from age 64 to age 65) as the HDB has informed him that Studio flat buyers must pay the balance on the completion date.

As Mr Chan does not have the $25,000 cash required. He has appealed to his Member of Parliament at his ward, HDB and the CPF Board, for a total of about 6 times, seeking a solution to his housing woes – either allow him to use more of his RA, HDB rental flat, Interim Housing Scheme or a 1 year HDB loan (as he is currently paying $1,500 a month for rental, he should be able to service the $25,000 HDB loan completely in about a year).

Based on their birthdates, I estimate that they can have a loan for about 14 to 15 months, depending on which month in the 3rd quarter this year their studio will be ready. If the HDB’s normal policy is to allow housing loan up to age 65, why can’t the Chans be given such a 1 year plus loan tenure?

Why is it that a studio flat must be paid entirely upon delivery with no housing loan allowed?

To date, all replies to him have been in the negative.

Whilst he appreciates the CPF Board’s stand that “the remaining balance in your RA (about $58,000) needs to be preserved for your retirement payouts. We hope you understand our position that there needs to be a balance between your retirement and housing needs”, he is in a predicament over his need for a roof over their heads.

How many elderly Singaporeans are there, who may be in a similar predicament as Mr and Mrs Chan?

In this connection, I understand that before the Minimum Sum was implemented in 2003, Singaporeans like Mr Chan would not have this problem of having CPF which be cannot use for a HDB flat.

I also understand that the policy in the recent past, was to allow half of the RA for a Built to Order (BTO) HDB flat (like a studio flat), instead of “only RA savings in excess of the Minimum Sum cash component (excluding interest accrued) can be used for housing”

As Mr Chan is already 64 years old, and doing freelance work as a self-employed earning about $2,500, he is very worried as to how long he can continue to pay for his current $1,500 monthly rental flat, if his “HDB studio” problem is not resolved, since the HDB has informed him that he is also not eligible for a HDB rental flat (Household income must be below $1,500) or Interim Housing Scheme.

Unless he takes the HDB’s suggestion to “consider renting a room instead of a whole flat in the open market”!

For cases of elderly lower-income Singaporean families without a HDB flat or HDB rental flat, like the Chans, the application of the rules for the CPF Minimum Sum scheme and the HDB Studio scheme, should have some flexibility. Otherwise, what’s the point of locking up their CPF and let them suffer the critical problem of not having a roof over their head in their sunset years?
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