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Forced to contribute to Medisave?

By Raymond Sim

I am writing to seek public opinion on my encounter with the Central Provident Fund Board. I might be wrong, but I just couldn't comprehend the rationale behind the rigidity of its policy over what should really be our money.

I have been self-employed since June 2011. Prior to that, I was a salaried personnel who contributed to my CPF religiously. I am the sole breadwinner of my family which consists of my wife and two primary schooling kids.

As my job is commission-based, my income is unstable. My annual income for June to Dec 2011 was $489, $4,452 for 2012 and $21,732 for 2013. I was not taxed by IRAS for income tax over these 3 years. However, CPF Board sent me a notice requesting that I contribute $1,738 to my Medisave account based on my income earned in 2013.

While IRAS had assessed that I did not make enough to contribute to the country, CPF Board deemed that I had enough disposable income to make contribution to my Medisave account. What make the whole contribution policy more absurd is that I would be summon to court and face a potential fine of $2,500 to $10,000 should I fail to make the contribution!

Nonetheless, I gave the benefit of doubt to the department for not being able to assess my real financial situation accurately. I wrote two emails to explain and seek exemption from making the contribution. I explained that I'm the sole breadwinner of my family, that my family is under the Financial Aid Scheme, and that I'm struggling to make ends meet for my family.

I also said that my current Medisave account amount is about $43,000, which is very near the Minimum Sum requirement of $43,500, and about $5,000 more before I hit the Contribution Ceiling of $48,500. Therefore, I would have sufficient amount in my account should the need arise. In addition, I do not have the disposable income to make the contribution unless I take a loan.

Both my appeals were responded with perfunctory replies telling me that there is nothing much they can do other than offer monthly instalments for me to make the contribution.

I forwarded my appeal together with the responses by CPF Board to Minister Tan Chuan-Jin and got another response from CPF Board telling me the same thing.

The message from them is clear and cold: "Regardless of your financial situation, you are to make the tabulated contribution either in lump sum or monthly instalment into your Medisave account or face potential summon to court and be fined between $2,500 to $10,000."

I simply couldn't comprehend the rationale behind the whole policy. If Medisave is really my money, why should I be forced to contribute to my account especially when I couldn't afford it? Even if I have that amount, wouldn't it make more sense to spend on my family's daily needs given my present situation?

While I appreciate that Medisave is a form of safety net for citizen's healthcare needs, should there not be flexibility when one Medisave amount is near or has met the Minimum Sum requirement and Contribution Ceiling, which were deemed sufficient by CPF Board to cover us in times of need?

Most ironically, why should one be punished for not making contribution into his own account? If one could not afford to make the contribution, why would CPF Board even deemed that he/she is able to pay the fine imposed by the court?

I have received no empathy and assistance even from the highest level of the Ministry concerned. What is left to do now is to find the money to make the mandatory contribution into my Medisave account to avoid the penalties.