BUDGET 2014: MINISTRY OF NATIONAL DEVELOPMENT
THE Ministry of National Development (MND) is studying a new reverse mortgage scheme to help seniors better convert the flats they own into cash, said its minister Khaw Boon Wan yesterday.
The move is part of a key focus this year on meeting the housing needs of the elderly, the poor and the vulnerable, he told the House when mapping out his ministry’s budget and policies for the year.
“Our priority is to help them retire comfortably with security” and so, it is timely to revisit reverse mortgage as an extra option for the elderly, said Mr Khaw.
“MND has begun a serious study of this option. We hope to formulate a practical scheme for our seniors,” he added.
A reverse mortgage is a financial scheme in which flat owners can use their home as security for a loan that will be dispensed in regular cash payouts.
Insurer NTUC Income previously offered such a mortgage scheme but it did not take off, Mr Khaw noted. Only 24 households took it up between the time it was introduced in 2006 and when it was scrapped in 2008.
But elderly folk asked for such a scheme last year during Our Singapore Conversation sessions, as they preferred to live in the same home and also retain it as an asset to bequeath to their children, the minister added.
The Government is also reviewing the Enhanced Lease Buyback Scheme, in which elderly households sell part of their flats’ leases to HDB and use the net proceeds to top up their Central Provident Fund Retirement Accounts.
Currently, only those living in three-room or smaller flats qualify, but the scheme may be extended to larger flats.
It is also comforting for many elderly folk to have their children and grandchildren living nearby, said Mr Khaw, acknowledging the calls of Ms Lee Bee Wah (Nee Soon GRC) and Dr Teo Ho Pin (Bukit Panjang) to build more studio and multi-generation flats.
While it is not difficult to do so in non-mature towns where new flats are still being built, it is harder in mature towns with fewer opportunities for new units, Mr Khaw said.
“Nevertheless, I want to push the limits to enable extended families to live near one another,” he added, without elaborating on how it will be done.
Another move for the elderly is that individual HDB flats are to be made more comfortable for them under the Enhancement for Active Seniors scheme, which is being reviewed.
The scheme subsidises the retrofitting of individual flats with elder-friendly equipment such as grab bars, ramps and slip-resistant bathrooms.
Its review, to be completed in a few months, looks at lowering the minimum qualifying age and subsidising more items.
Summing up his new focus, Mr Khaw said: “This year, I want to do more for the elderly, the vulnerable groups, and help extended families live near one another.”
The new emphasis is possible because the property market is stabilising and the backlog of newlyweds needing their first home has been cleared, he said. As a result, vulnerable groups, such as divorcees with children, single parents and former convicts, can receive more attention, he added.
Ms Lee and Mr Seah Kian Peng (Marine Parade GRC) had shone a spotlight on vulnerable families.
Many are victims of circumstances and deserve society’s support, said Mr Seah, who suggested that community development councils’ input be sought when an applicant’s housing needs are being evaluated. Ms Lee also suggested that the MND remove all forms of waiting periods for divorcees with children.
Both suggestions will be studied, said Mr Khaw: “Meanwhile, we will continue to exercise flexibility and compassion whenever we receive worthy cases.”
The MND is on track to reach 60,000 rental flats by 2017.
Applicants now wait seven months for a rental flat, down from 21 months in 2008.
But getting a rental flat is not the end, and tenants who are able to buy a flat will be helped to do so, said Minister of State for National Development Mohamad Maliki Osman.
Source: The Straits Times © Singapore Press Holdings Limited. Reproduced with permission.
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