Netizens question compulsory CareShield; One year of free scholarships to foreign students equivalent to 16 years’ ElderShield payouts

Yesterday (2 Sep), the CareShield Life Bill was passed in the PAP-dominated Parliament after its second reading, forcing Singaporeans who were born in 1980 or after to pay compulsory insurance fees starting next year.

So, come next year, those aged 30 to 40 must join CareShield Life and start paying premiums. Future cohorts will join at the age of 30. It is however, optional for those who were born in 1979 or earlier.

Premiums start at $206 a year for men and $253 a year for women at the age of 30. They will make payments till the age of 67. Should “severe disability” strikes, the policyholder will receive a payout of at least $600 a month, for as long as care is needed.

For those who complained that $600 a month is not enough, Health Minister Gan Kim Yong said they can go buy supplementary schemes from private insurance companies. That is to say, one has to pay more premiums.

“Financing our long-term care needs is a shared responsibility,” said Gan. “We come together as a society to pool our risks through insurance, CareShield Life and ElderShield, to address the variability of long-term care costs.”

The mandatory CareShield Life insurance scheme is meant for covering Singaporeans in case they are afflicted with “severe disability”. It is meant to gradually replace ElderShield, which presently remains optional for Singaporeans to join. In the case of ElderShield, which started in 2002, the payouts for those “severely disabled” are only $400 a month for up to 5 or 6 years.

Meanwhile, it was also reported in the media last year that some $3.3 billion of premiums have been collected for ElderShield. But only $133 million (4%) has been paid out in claims so far, leaving about $3.2 billion and the interests generated in the fund.

Netizens unhappy with compulsory CareShield Life

Many netizens asked why CareShield Life can’t be made optional.

Others questioned the large sums of money collected in ElderShield with only pittance payouts. They wondered if CareShield Life would end up the same, with large sums of money collected from Singaporeans sitting in the fund and earning interests but paying out little to the people really in need.

In particular, one netizen pointed out that the Singapore government seems to have hundreds of millions of dollars worth of free scholarships given out to foreign students every year but can’t afford to absorb the $133 million ElderShield payouts since 2002.

“Something is wrong somewhere,” he commented.

Indeed, last month (5 Aug), thanks to a question from Workers’ Party’s NCMP Leon Perera, who asked about the Government’s spending on foreign students, Education Minister Ong Ye Kung was forced to disclose in Parliament that about S$238 million a year on scholarships and tuition grants are spent on foreign students studying in Singapore.

Ong, being pushed into the defensive, tried to assure everyone saying, “No Singaporean is ever displaced from institutes of higher learning because of an international student.”

Of the S$238 million, S$108 million are spent on tuition grants. The rest of the S$130 million are on scholarships.

The S$238 million amounts to about 1.8 per cent of the ministry’s annual budget of S$13 billion, a proportion which NCMP Perera noted that it “was on the high side”.

So, assuming the government doesn’t give out any more free scholarships to foreign students for 1 year, the money saved could easily pay for the ElderShield payouts from 2002 to 2018, or past 16 years.